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Lorna Shankowsky joins ITWAL in foodservice role

ITWAL welcomes Lorna Shankowsky to the position of director of food service, effective October 21st, 2019. In this role, she will be responsible for the overall management and development of ITWAL’s food service business, as well as being a contributing member of the senior management team. 

“Lorna will work closely with both our food service suppliers and members, ensuring we are maximizing on our selling, marketing, information and distribution solutions,” ITWAL president and CEO Ross Robertson said in a statement. “Lorna is an accomplished executive having focused on building and nurturing relationships to drive business growth.”

Shankowsky spent the bulk of her career at Kraft Food Service Division, most recently as director, national distributor development, before becoming director of sales for Canterbury Group. 

 


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Wake up to how coffee can drive revenue

Turn your c-store into a hot (beverage) destination

Screen Shot 2019-10-15 at 12.56.03 PMPouring effort into creating a positive coffee experience for customers has some serious perks, as both convenience store owners and their java partners can attest. Based on the sheer size of the potential market, opportunities to capitalize on it are abundant. Hands down, coffee is the most consumed beverage among Canadian adults, even more than tap water. It’s a $6.2 billion industry, including $4.8 million in foodservice sales, according to the Coffee Association of Canada. 

While Tim Hortons dominates the domestic coffee biz, there’s room for others to muscle in and grab some market share for themselves. And here’s another important number to ponder: 67% of Canadians visit a convenience store at least once a month, according to a Technomic study, which represents an opportunity to create a coffee following with a strong product.

Debbie RIx, owner of Lucky Penny

Debbie Rix, owner of The Lucky Penny

Debbie Rix, owner of The Lucky Penny, has attracted a steady drip of coffee drinkers to her location near Trinity Bellwoods Park in Toronto. She has focused on offering locally sourced products, like coffee from the city’s own Propeller Coffee Co., and fresh milk and cream from Kawartha Dairy. Her convenience/general store has also adopted green practices and cut down on waste by foregoing plastic stir sticks in favour of metal spoons and introducing a loaner mug program, which allows customers to fill up the mug and return it when they visit next. 

“It has been very successful,” notes Rix. “Most definitely, coffee sales have been important drivers for the business. About half of our customers come for grab ’n go items and half of that is coffee. The remainder come to pick up groceries and other items, from a mix of retro candy to romaine lettuce and Frisbees.”

Since opening five years ago, Lucky Penny strives to be responsive to the wants its clientele. That definitely applies to coffee preferences. “We’re not coffee snobs,” says Rix. “Our staff are trained to make a customer’s coffee just how they like it. We’ll try to make it happen.”

The store’s aim-to-please philosophy helps build loyalty, as does a points program that rewards customers for using reusable coffee mugs and for every dollar they spend. A downloadable mobile app helps track customer spending and point tallies. Fifty points gets you a free coffee and 100 earns $5 off an order. 

Coffee sales drive food sales

Coffee sales drive food sales

To encourage food sales, fresh baked goods are delivered daily, while yogurt parfaits are made on-site. As customers wait for their coffee order, they stand next to an enticing display of pastries. And before transactions are finished, they are offered a special deal of half a loaf to go along with their coffee. When prepping their coffee, clients can add soy/oat/almond/non-fat/full fat milk and sweeten with raw sugar, Stevia, simple or agave syrup, honey, plus a dash of cinnamon. It’s further evidence of the “have it your way” philosophy and reflective of consumers’ increased desire for healthier eating options. 

Coffee partners can play an important role in getting strong sales brewing, says Dave McQuillin, senior director of food services, Club Coffee L.P., based in Toronto. “We can provide support with branding of coffee in the stores with clear, modern visuals and clean, well maintained equipment. As well, we can provide graphic design for in-store merchandising and loyalty programs. It can elevate your store and make yours the destination over other retailers.”

But even the best branding won’t work without good coffee. While consumers want convenience and quality, the coffee itself cannot disappoint. “The coffee market has shifted and consumers are knowledgeable and able to recognize good coffee versus bad,” explains McQuillin. “A poor experience will absolutely turn them off.” That underscores the need for keeping coffee fresh and equipment pristine, up-to-date and in good working order. 

To sweeten the deal, promotions help drive sales. “The most successful ones have been ‘any size for a $1’ and bundle discounts, like coffee and a muffin or a breakfast sandwich. They do very well, especially in the breakfast space,” he says. 

Convenience store owners may also want to borrow a tactic out of the fast food playbook. In March 2019, Burger King introduced a coffee subscription program stateside for its BK Café. Through the company’s app, users can enjoy a small daily 12 oz. coffee for US $5 a month, which can whittle down the price paid to 17 cents per cup. For hardcore caffeine enthusiasts, it’s a potentially attractive perk, sure to keep the java flowing.

 

Hip sips: Coffee sales by the numbers

  • 16% of past-day coffee drinkers used a loyalty card, while 7% used a mobile app, when ordering coffee in the past week, according to the Coffee Association of Canada.
  • 3.2: average cups per day consumed by coffee drinkers.
  • 42% of consumers say they purchased hot brewed coffee/lattes/etc. at a convenience store in the last three months, making coffee the second highest ranking items in terms of sales, second only to fountain beverages, according to one U.S. study. 
  • 38% of convenience store customers who ordered coffee said they were interested in single origin and flavored coffee roasts, according to research firm Mintel. 
  • 56% of Americans who have visited a convenience store in the past three months feel that it makes coffee drinks as good as coffeehouses, according to Minitel data. It also discovered many consumers associate convenience stores with coffee. IIf a coffee program is done well, it is likely to boost overall foodservice sales.

Side bar: 7 ways to perk up coffee sales

  1. Channel your inner barista. Sophisticated coffee fans want to be able to customize their drinks with flavoured creamers and syrups.
  2. Stock healthier options. Mix up your selection of grab ’n go food-friendly items by offering things like vegan donuts, whole wheat or flax muffins, and fresh fruit.
  3. Upgrade your equipment. New self-serve Schaerer machines grind the beans and make pressure-brewed cups similar to French press versions. 
  4. Offer high-octane options. While sales of some coffee types have been flat, espresso sales have experienced a big leap recently.
  5. Go green. Consumers like to feel good about the coffee they purchase. Consider organic, fair-trade sourced beans, unbleached paper coffee pods, wood or bamboo stir sticks instead of plastic ones, and recyclable cups and lids.
  6. Just chill. Expand your coffee selection to include cold brewed coffee beverages, which experienced a whopping 80% jump in sales, according to one Bloomberg report. Frozen cappuccinos or smoothies spark coffee consumption during warm weather.
  7.  Celebrate! Build a promotion around International Coffee Day on October 1. That could include special pricing, new products, contests, social media blasts, or pairings with a food item.

This article originally appeared in the September/October issue of Convenience Store News Canada.


7-Eleven Canada Lands at YYC Calgary International Airport (CNW Group/7-Eleven Canada)

New 7-Eleven stores expand foodservice offering at Calgary airport

7-Eleven Canada Lands at YYC Calgary International Airport (CNW Group/7-Eleven Canada)

7-Eleven Canada Lands at YYC Calgary International Airport (CNW Group/7-Eleven Canada)

7-Eleven Canada is opening two new convenience stores at YYC Calgary International Airport. Open 24/7 and located in the Domestic Terminal, Concourses A & C, both stores will serve travelers and airport employees, as well as those waiting to pick up.

“Whether you are a domestic traveler, an airport employee or are awaiting the arrival of a loved one, we are excited to be adding a convenience factor to the YYC community with these two new locations,” says VP and general manager of 7-Eleven Canada, Norman Hower. “We want to provide travelers and employees with an easy, 24/7 solution for last minute meals, souvenirs, flowers or travel items.”

The newly open stores are conveniently located and offer a wide variety of “hot from the oven in minutes” pizza, wings and hot snacks, fresh to go sandwiches and meals, and beverages, as well as 7-Eleven’s coffee bar and classic Slurpee stations. Freshly cut flowers from fellow airport retailer, A Touch of Petals, are also available in store.

“We are so happy to celebrate the arrival of 7-Eleven Canada at YYC. The brand is globally recognized and has close community ties to Calgary – being home to a Slurpee’s first pour in Canada 50 years ago,” says Rob Palmer, CFO and VP finance, The Calgary Airport Authority. “Our guests asked for changes to our Eat and Shop options and one of the ways we’re delivering is with this partnership with 7-Eleven.”

Based in Irving, Texas, 7-Eleven operates, franchises and/or licenses more than 69,000 in 17 countries, including 11,800 in North America.


Fast food chains launch store versions of menu items in competitive market

Fast-food fans no longer have to go to – or even order from – their favourite eateries to indulge, as grocery stores now stock a wide array of beloved menu items so superfans can heat up a St-Hubert chicken pot pie, slather on Swiss Chalet gravy sauce or whip up a pot of Tim Hortons homestyle chili at home.

The move to sell restaurant-branded goods in supermarket aisles benefits fast-food chains and grocers as competition for consumers’ attention intensifies.

“This has been a lot of buzz in the industry,” said Robert Carter, a food service analyst with market-research firm NPD Group, of the increasing restaurant fare in grocery stores.

Most recently, Tim Hortons introduced three of its soups and its chili to supermarket shoppers.

The company started selling its cream of broccoli, chicken noodle, and chicken and rice soups, as well as homestyle chili at some retailers in August, said spokeswoman Sarah McConnell in an email.

The four products are now sold at a number of retailers across Canada – including Sobeys, FreshCo and Shoppers Drug Mart – McConnell wrote, adding they plan to make the products available indefinitely as they “do not have a list end date.”

This is not Tim’s first foray into supermarket aisles. In January, the company announced it would start selling instant coffee, as well as iced cappuccino and iced coffee bottled drinks.

It also revealed plans to release a double-double coffee bar, a snack made without chocolate, which the company says will be available in stores later this year.

The coffee-and-doughnut chain is not alone in expanding where it sells its food.

Quebec-based St-Hubert Group first introduced its barbecue sauce to supermarkets in 1965. Since then, the rotisserie restaurant has grown its supermarket aisle to dozens of items, including a variety of fresh and frozen meat pies, chicken wings, cans of poutine gravy, and fresh coleslaw.

The Keg Steakhouse and Bar, a British Columbia-based chain, sells several salad dressings, sauces, marinades and seasonings, as well as ribs, burgers, and bacon-wrapped scallops.

St-Hubert and The Keg’s parent company, Recipe Unlimited, did not respond to a request for comment.

McDonald’s Canada launched Big Mac, McChicken and Filet-O-Fish sandwich sauces for a limited time in 2017 to celebrate its 50th anniversary, wrote spokeswoman Veronica Bart in an email. The bottles sold until supplies ran out, but the burger chain still sells its coffee at grocery stores.

“The competition is becoming so aggressive that all the operators are looking at ways to increase revenue streams,” said Carter.

Recently, restaurant growth has been relatively stagnant, growing a few percentage points every year, according to NPD data. Total quick-service restaurant traffic for the 12 months ending August 2019 grew 2%.

“Grocery is now popping up as a really viable opportunity,” he said.

The move into grocery stores allows chains to increase their distribution, build more brand awareness and create more customer loyalty in and outside of the home, said Carter.

“The bigger you can create your distribution network, the better it’s going to be for your business overall,” he said.

While restaurants remain the most important channel, Tim Hortons regulars also shop elsewhere.

“We also all know that we pick up drinks in convenience stores, and when we do our weekly grocery shopping we are picking up soup and coffee for our homes,” wrote spokeswoman Jane Almeida in an email.

When customers in the supermarket reach for that can of soup, Tim Hortons just wants it to be their can.

While restaurants can benefit from the grocery store arrangement, so can the supermarket chains. Grocery store traffic has been slipping in recent years, said Carter. In an effort to lure shoppers, some supermarkets morphed into grocerants, for example, adding a hot food selection to be consumed on premise.

Grocers are likely keen to bring in products from highly recognizable brands, like Tim Hortons, that may draw more people in, Carter said.


Star Women Awards

CSNC honours winners at inaugural Star Women in Convenience Awards Breakfast

Industry leaders and supports came together to celebrate the 2019 Star Women in Convenience at the inaugural Awards Breakfast hosted by Convenience Store News Canada.

Group brand director Kathryn Swan welcomed attendees from across the country

Group brand director Kathryn Swan welcomed attendees from across the country

“We are encouraged by the response and how the industry has embraced these awards for women,” group brand director, Kathryn Swan said in her opening remarks. “This year’s 17 winners come from all facets of the c-store spectrum—operations, sales, management, distribution and product development. They are incredible examples of women who demonstrate commitment, innovation and leadership in convenience.”

Now in its second year, Convenience Store News’ Star Women Awards recognizes exceptional women making a difference in the convenience industry. The inaugural event was held Oct. 8, 2019 at the International Centre in Mississauga, Ont.

Keynote speaker and Ipsos VP Kathy Perrotta

Keynote speaker and Ipsos VP Kathy Perrotta

In addition to the awards, attendees were treated to an insightful keynote by Ipsos Canada VP Kathy Perrotta, who delved into trends and habits shaping consumers’ food choices, while highlighting the opportunities for c-stores to up their convenience factor by becoming healthy food and meal destinations for busy Canadians (check out the November/December issue of the magazine for a synopsis of Kathy Perrotta’s keynote).

Star Women Leadership Panel

Star Women Leadership Panel

Tony Chapman of Chapman Reactions moderated the Star Women Leadership Panel, featuring Bonnie Birollo of Circle K, Caroline Evans of JTI-Macdonald, Marie-Helene Jauron of PepsiCo, Wendy Kadlovski of Nicholby’s and Azra Khan of RanaCorp/Shell Canada. It was a dynamic and authentic conversation about the importance of mentorship, taking risks, leading by example and the role the convenience industry plays in community and families.

In addition to honouring the 17 2019 Star Women, the event paid homage to the 2018 winners. The 2018 and 2019 winners travelled from across the country to attend the event, many bringing with them colleagues, friends, family and community leaders.

 

2019 Star Women winners

2019 Star Women winners

For more photos from the event, visit the Star Women website.

Or, keep an eye out for the upcoming November/December issue of Convenience Store News magazine.

Thank you to everyone who attended and supported the Star Women in Convenience Awards!


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Meet incoming NACS chair Julie Jackowski

Julie Jackowski NACSNewly named NACS Chair Julie Jackowski never intended to end up in the convenience store industry. Yet the path she took to get there taught her some important lessons, she recalled during the closing general session of the 2019 NACS Show.

“I didn’t grow up in the industry,” Jackowski told the audience on the final day of this year’s event, held Oct. 1-4 at the Georgia World Congress Center in Atlanta. “I didn’t seek out the industry, and somehow it found me.”

Jackowski became a lawyer and focused on employment law to fulfill her desire to help people. When a partner at her law firm alerted her to a job opportunity at convenience store chain Casey’s General Stores Inc., her first concern was that they might be trying to get rid of her but, after looking into the position, she found that the in-house legal role was a great fit for her due its focus on employment law and people.

During her final interview with former Casey’s CEO, the late Ronald Lamb, he told her something that significantly affected her view of the company and sealed her decision to take the job: “‘Julie, you need to understand, if you come to work for Casey’s, an attorney is no better than our part-time doughnut makers,'” she recounted.

His point was that every single person at Casey’s, regardless of education or job title, is critical to the success of the operation.

“The goal always, always has to be to lift each other up to better serve our guests and our communities,” she said.

That holds true for the convenience store industry as a whole, and the NACS Show as an event, according to Jackowski, who today serves as senior vice president, corporate general counsel and secretary of Casey’s General Stores. By coming together to share ideas, c-store leaders can improve the industry for everyone.

“That’s what makes it really fun,” she said.

Looking to the future, Jackowski advised NACS showgoers to remember that regardless of market size, every retailer is competing against the internet and consumer expectations of unlimited inventory and fast delivery.

Taking part in the NACS InStore program, which brings c-store retailers and the nation’s legislators together, is another way NACS members can advocate for the industry.

Jackowski closed her presentation by talking about Casey’s just-launched brand campaign, “Here For Good.” The tagline relates to the company’s quality food, but it also relates to the guest experience and how Casey’s serves its communities.

It tells the story of the c-store industry and of NACS, too, Jackowski believes.

“We all learn from each other. We make each other better. And we are there for each other every single day,” she concluded.

Originally published at Convenience Store News.


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Circle K expands deliver in the U.S.

Circle K’s boosted its on-demand delivery pact with Favor to reach nearly 600 convenience stores in Texas.

This announcement comes on the heels of Circle K’s initial delivery service rollout with Favor in July 2019, which included more than 160 Circle K locations across the Greater Houston area.

“We are excited to expand our partnership with Favor in all remaining Circle K Texas markets across the state and to see our Circle K stores add this service beyond the soft rollout in the Houston area,” Paul Rodriguez, vice president of Circle K Texas, said in a release. “An important goal for Circle K is to continue to find ways for our customers to have an easier and more convenient shopping experience. Home delivery is one more option we can now add to Circle K customers’ shopping choices.”

“We are thrilled to continue expanding Favor’s partnerships across the state to offer Texans the most convenient service on the widest selection possible, whether it is dinner from a local restaurant or now, their favorite beer, snacks and more from Circle K,” said Keith Duncan, chief revenue officer of Favor.

Customers can get beer and other items from Circle K delivered by searching for “Circle K 21+” in the Favor App or online at favordelivery.com.

Circle K is a wholly owned-subsidiary of Canada-based Alimentation Couche-Tard. Couche-Tard’s network comprises 9,792 convenience stores throughout North America. The company operates a network of close to 2,200 stores in Canada, from the Maritimes to Western Canada.


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The future is frictionless

Innovative technologies clear the path to purchase

Screen Shot 2019-10-07 at 12.28.28 PMTime has always been of the essence, but c-store owners and employees may have noticed a shift in the degree to which time is valued by their customers. Consumers today want to make a purchase, and they want to make it quickly. They want to get in and out of a store quickly—with everything they intended to buy.

Patience, it seems, is in short supply.

 According to a recent study from the Retail Council of Canada (RCC), 41% of consumers said they had a problem making an in-store purchase. The study, which surveyed more than 5,000 Canadians, found that customers are expecting a more convenient, seamless and integrated experience no matter where they shop. Retailers who do not provide a seamless experience may find their customers going elsewhere.

“We are seeing a consumer who will not hesitate to switch retailers when problems occur,” says Diane Brisebois, president and CEO of the Retail Council of Canada in Toronto.  

The demand for a better shopping experience is being driven by millennials RCC’s survey found. This group reported more problems with both online and in-store purchases than older consumers (59% vs. 32%). Younger consumers, the report concluded, expect flawless shopping experiences and are not willing to put up with, well, hiccups.

Consumers expect a seamless experience

“Younger Canadians are technology experts. They want shopping to be more personal, faster and better, and it should work across all devices and surfaces by merging online and offline to create one intuitive experience,” says Eric Morris, Google’s director of retail in Toronto. “They are moving fast, and retailers need to move faster. If a retailer can’t connect their customer to the right product in as few steps as possible, they will go elsewhere.” 

The seamless experience is called frictionless shopping, and it is becoming a cornerstone for retailers of all sizes and products. “We found that retailers that were not able to reduce points of friction from their stores and provide convenience, service and value lost customers,” says Paula Courtney, product founder at WisePlum, a Toronto-based firm that helps retailers understand their customers’ needs and expectations. 

A white paper, also produced by the Retail Council of Canada, concluded that speed, convenience, selection, service, access and value for price are all key elements in the successful path to purchase for a customer. “New technologies have allowed consumers to access such services as digital payment options, instant inventory checks and price comparisons, 3-D product viewing, virtual consultants and all these innovations are redefining the customer experience,” the report states.

C-stores rise to the challenge

If consumers are throwing down the gauntlet, c-stores are rising to meet the challenge. Owners are looking to integrate digital services and human contact. Scott Knack, from Alcona Esso in Innisfil, Ont., recently launched an app for his car wash. His customers—many of whom are commuters—can even pay for their car wash at the drive-through window in his c-store, Alcona Esso. “Convenience is important,” Knack says simply.

 Customers are redefining what constitutes convenience, and the retail sector is rushing to exceed expectations. Among the latest innovations coming soon to a c-store near you are digital shelves. On the way out are paper price tags and labels. In their place will be displays that allow for immediate price changes, flashing advertisements and promotions.

 Also well in hand is the technology to allow individuals to use their smartphones to scan items while they are shopping, with scanning speeds typically only seen in commercial-grade handheld scanners. Customers can view the current total of their shopping basket and, at any time, can simply pay with their mobile device and avoid waiting in line at a checkout.

 “Mobile self-scanning apps enable brick-and-mortar retailers to offer customers a blended physical-digital shopping experience that combines the convenience of e-commerce with the immediacy of the store,” says Samuel Mueller, co-founder and CEO of Scandit, an international barcode company. 

 That convenience is customer-specific. Unveiled at this year’s National Retail Federation’s Big Show in New York, for example, is an augmented reality app that will enable customers with allergies to hover their device over a shelf and instantly be told which products are safe for them. 

 Earlier this year, AWM Smart Shelf, a retail technology firm in Aliso Viejo, Calif., introduced its Frictionless Shopping Application, which uses cameras and computer vision to automate the retail experience—including checkout and payment. The cameras located around the store interpret and understand who the customer is, what products they pick up from the shelf and ultimately what is included in their final purchase decision, then charges their digital wallet as they exit the store.

Screen Shot 2019-10-07 at 12.32.01 PMOf course, when it comes to digital innovation, Amazon has taken top spot this year with its chain of 13 Amazon Go stores now up and running in four U.S. cities (more to come). Customers pick up the products they want and exit the store. There are no checkouts and no payment taken. Purchases are charged automatically to the customer’s Amazon account. 

Rapid change is imminent 

Many of these advances may seem most appropriate for larger convenience store chains and grocery stores, but such technology is becoming more mainstream, more affordable, and more in-demand by shoppers in c-stores of all sizes. Indeed, at the 2019 Conexxus Annual Conference held in Nashville, TN, this spring, the more than 200 c-store members in attendance were told that creating a frictionless shopping experience using the latest in technology is already a reality. Gray Taylor, executive director of Conexxus, a tech organization for the convenience store sector headquartered in Alexandria, VA, pointed out that loyalty programs and smartphone purchases are now well entrenched in the sector. Within the next five years, he predicted, everything from enhanced cloud-based security to automated checkout to AI will be part of the c-store experience for shoppers.

 

Within seven years, possibly within the next three, Taylor believes, c-stores will be relying on advanced analytics to better understand customers, the Internet of Things for such issues as food safety, and home delivery using autonomous delivery vehicles.

Yet the more things change, the more they stay the same. What continues to matter most to customers is having a relationship with a retailer they trust. That’s why for Scott Knack, and other c-store owners across Canada, the best shopping experience for customers is one that makes them feel good—not just efficient and expedient. It’s ultimately about the human experience. 

“Look customers in the eye,” says Knack. “Lift your head. Have a conversation.”

 

This article originally appeared in the September/October issue of Convenience Store News Canada.


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Convenience stores could benefit from e-cigarette ban, say analysts

A growing move to ban flavoured e-cigarettes due to health concerns particularly in youth could actually benefit convenience stores in the long run, say retail analysts.

“We believe the FDA’s plan to remove mint/menthol e-cig flavours (in addition to all other non- tobacco flavours) would without question encourage a return to combustible cigarettes,” Bonnie Herzog of Wells Fargo Securities wrote in a report after conducting a survey of retailers.

A large majority of retailers surveyed believe the removal of e-cigarettes would migrate smokers to combustible cigarettes that represent a larger portion of convenience store sales.

One-third of retailers surveyed also expect mint and menthol smokers would switch to combustible cigarettes because those consumers tend to want to stick with menthol products.

Almost half of the retailers believe the removal of flavoured e-cigarettes won’t help to reduce youth usage as kids likely move to the black market. Yet some 40% of retailers say they are seeing some deceleration in Juul sales and nearly 20% are seeing more combustible cigarette sales as news reports increase about health issues with vaping.

Some U.S. states are moving to ban or curtail vaping but Herzog said she is “cautiously optimistic” that a complete ban on e-cigarette flavours will be imposed by the Food and Drug Administration.

In Canada, the country’s public health officer said last week at least three reports of potential vaping-related illnesses were being investigated.

Quebec health officials confirmed Friday the province’s first case of severe pulmonary illness linked to vaping. That followed a report from the Middlesex-London Health Unit that a teen from London, Ont., who was using e-cigarettes daily, suffered a severe case of pulmonary illness, the first confirmed case of vaping-related lung disease in Canada.

Herzoz added that 67% of retailers believe the removal of e-cigarette flavours would increase the competitive advantage of IQOS, a heat-not-burn cigarette alternative made by Philip Morris International that has received FDA premarket approval.

Even if e-cigarettes aren’t banned outright, large convenience store chains such as Alimentation Couche-Tard would be helped in the long-term by increased regulations of e-cigarettes because they have the ability to absorb the additional costs, wrote RBC Capital Markets analyst Irene Nattel in a report.

“Given cost of compliance/administrative burden associated with regulated products…we’d expect chains with financial flexibility to gain share over time, not unlike what happened to breweries during the last century,” she wrote.

Tobacco represents about 38% of merchandise store sales at convenience stores and about 40.5% at Couche-Tard, Nattel said. However, electronic devices represent less than 25% of other tobacco products, which account for less than 20% of tobacco sales

Couche-Tard CEO Brian Hannasch said that while these products aren’t currently “material” to its revenues, the Quebec-based retailer hopes they remain available for adults to give smokers “an avenue of lower risk as they pursue nicotine.”

The company only sells closed vaping systems that already contain liquid, instead of ones that allow consumers to use their own liquids.

“We know there’s demand there but if flavours are attracting children we’re OK with it going away,” he told The Canadian Press after its recent annual meeting. “It’s the right thing for society and we just want it to be done on a thoughtful fashion and based on facts.”

 


Stay of legal proceedings for tobacco companies extended to mid March

An order suspending legal proceedings against three major tobacco companies has been extended until mid-March.

Ontario Superior Court Justice Thomas McEwen agreed to again renew the stay on Wednesday but said he would wait until the next day to set an end date, and release his reasons later.

The order was first granted in March after the companies – JTI-Macdonald Corp., Rothmans, Benson & Hedges and Imperial Tobacco Canada Ltd. – lost an appeal in a multibillion-dollar class-action lawsuit in Quebec.

The stay is meant to maintain the status quo as the companies negotiate a global settlement with their creditors, including the class-action members and several provincial governments seeking to recover smoking-related health-care costs.

The companies told the court they needed a five-month extension so they can continue to operate while they work towards a settlement.

Lawyers representing the Quebec claimants, however, said the stay should only stretch to mid-January so the companies will be motivated to present a proposal.

Mark Meland said Wednesday the companies are no closer to making a settlement offer than they were in March, and it’s not enough to simply take part in mediation.

The companies obtained the stay as part of the creditor protection process after Quebec’s highest court upheld a landmark ruling that ordered them to pay billions in compensation to smokers in two class-action lawsuits.

McEwen also ruled Thursday a motion by the Canadian Cancer Society, which sought to participate in the court case and mediation despite not being one of the companies’ creditors.

The judge said the organization could take part in the court case but not in the mediation. His reasons for that decision will also be released at a later date.