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OCSA partners with Paygos for e-commerce platform

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The Ontario Convenience Stores Association is partnering with

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Paygos to create a service that will enable independent convenience stores to order merchandise from a centralized cloud-based platform.

Developed and managed by Paygos, the e-commerce platform will feature a wide range of CPG products, as well as automotive items and tobacco (the goal is to add beer when legislation is passed for convenience store sales).

“Our solution relies on existing distribution partners to fulfill all orders,” Paygos CEO Hesham Shafie explained in a release.

The service will be free to use for convenience stores in Ontario: The OCSA represents more than 6,000 independent retailers and regional chains in the province.

“For many years the convenience channel has searched for a business partner that can coordinate programs and services for the thousands of family-run convenience stores in Ontario,” said OCSA president and CEO Dave Bryans. “In a changing retail environment, working together with manufacturers and Paygos will allow independent store owners the same opportunities as major retailers in the province.”

OCSA invites retailers to participate in tobacco survey

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The Ontario Convenience Stores Association is conducting a survey to gather information to share with the Ontario Government in an effort to find solutions to illegal cigarettes, while understanding the importance of the tobacco business for convenience stores.

Independent, chain and franchise operators are invited to participate in a survey and share their experiences and thoughts.

“If you are concerned about contraband and what it is doing to your revenue and traffic, then here is a great opportune to weigh in as a small business owner,” says OCSA president & CEO Dave Bryans. He will be sharing the information with the Tobacco Project Team, which is making a report to the Minister of Finance in August. “The government wants to hear from the convenience sector themselves, small business owners and how it effects them.”

Click here to complete the survey.

Coca-Cola and Sheridan College team up to produce safety shields for c-stores

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Source: Coca-Cola

Coca-Cola is working with Sheridan College’s Centre for Advanced Manufacturing and Design Technologies (CAMDT) to produce and distribute protective countertop shields for small businesses, including local convenience stores and restaurants hit by the COVID-19 pandemic.

The initiative is designed to support and help business owners continue to operate while maintaining physical distancing measures.

The project came about when Coca-Cola spoke to their customers and realized that a number of smaller, local businesses did not have protective shields or or only had temporary solutions, thereby putting staff and customers at risk.

“Retailers and restaurants are working hard to ensure that Canadians can get the food, drinks and supplies they need during this challenging time,” Ron Soreanu, VP, public affairs & communications at Coca-Cola Ltd., said on the company’s website. “We know that the COVID-19 pandemic has been devastating for many retailers and we wanted to help businesses that may be overwhelmed trying to keep their business running. Protective barriers between the cashier and the customer will give an extra layer of confidence to everyone during their shopping experience. And, we hope that this investment will enable Canadians to continue supporting their favourite local store or restaurant as our economy begins to re-open.”

Coca-Cola Ltd. is investing $75,000 to fund the purchase of materials and lead the project. Coke Canada Bottling is sourcing the locations and stores that need protective shields and will lead distribution and delivery.

Dave Bryans, president and CEO of the Ontario Convenience Stores Association, says his organization “has partnered with Coca-Cola and Sheridan College to supply safety shields to family run c-stores in Ontario. We will be installing these wonderful new shields in upwards of 100 Hasty Markets throughout the province ensuring the safety of our customers and employees. A big thanks to both Coca-Cola and Sheridan College.”

Sheridan College designed the prototype behind these shields and is using an alternative form of plastic, which is just a story as plexiglass, for which there are shortages across North America due to high demand in the wake of the pandemic.

Sheridan is manufacturing multiple designs to suit different countertop configurations for employees working at cash registers or takeout counters.

“Our dedicated team responds to industry needs in an agile way and puts Sheridan in a position to contribute to our communities efficiently and effectively,” Dr. Michelle Chrétien, director of CAMDT at Sheridan College, said in a statement. “We’re delighted to be supporting small business owners with a solution that helps facilitate safe interactions with customers.”

Industry reacts to cross-Canada contraband cigarette bust

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Following a major crime bust last week, 16 people are facing charges and millions on contraband cigarettes are off the streets.

According to the OPP, a two-year investigation, dubbed Project Cairnes, took place across Ontario, British Columbia and Quebec, and targeted the illegal manufacture and distribution of contraband tobacco, as well as cannabis and other drugs.

Among the items seized, were 11.5 million contraband cigarettes, with an Ontario street value of $942,000, as well as 1,714 pounds of cannabis, with an estimated street value of $2.5 million.

“The depth and scope of this investigation reveals just how extensive the problem of contraband tobacco and its links to organized crime is in Canada,” Anne Kothawala, president of the Convenience Industry Council of Canada, said in a statement. “These groups are well-financed and organized, and their operations have major consequences on public health and safety as well as on small business convenience retailers.”

The tax loss associated with the cigarettes seized throughout the investigation is estimated at $3.3 million.

“Particularly at a moment when governments are looking to finance COVID-19 response and recovery efforts, decision-makers should support even greater actions to break up contraband networks that consistently evade taxes,” said Kothawala. “These are criminals who are flooding the legal market with cheap, unregulated cigarettes that have economic consequences for both law-abiding retailers like convenience stores as well as governments across the country.”

She further noted that these illegal products are more easily obtained by youth, as organized criminals are not concerned about access to tobacco by minors.

According to The Toronto Star, “The project began as an investigation into a tobacco plant on Six Nations of the Grand River First Nation, near Brantford. The OPP said that operation was controlled by a GTA-based criminal organization and that no benefit or investment was provided for Six Nations.”

The fight against contraband tobacco is ongoing. As the convenience store industry’s number one dollar sales category, stopping contraband and the illegal sale of cigarettes is an important issue.

The Ontario Convenience Stores Association is asking independent, chain or franchise operators to participate in a related survey.

“If you are concerned about contraband and what it is doing to your revenue and traffic, then here is a great opportune to weigh in as a small business owner,” says CEO Dave Bryans, adding he will be sharing the information with the Tobacco Project Team, which is making a report to the Minister of Finance in August. “The government wants to hear from the convenience sector themselves, small business owners and how it effects them.”

Click here to complete the survey.

COVID-19 a boon for c-store tobacco sales

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With stay-at-home measures in place across the country, c-stores are experiencing an unprecedented spike in tobacco sales, in part because First Nations reserves (and their popular smoke shacks) are largely closed to outside visitors

Dave Bryans, CEO of the Ontario Convenience Stores Association, estimates that the legal tobacco business is on track to grow by 20-25% while the reserves stay closed and he’d like to see c-stores to hold on to that business once the restrictions are lifted.

However, it’s an ongoing battle and the lines are fuzzy, with many smokers not even realizing that it is often illegal to purchase cigarettes on a reserve. Many Canadians make a regular pilgrimage to stock up, but experts say it’s important people understand the difference between being in possession of legal and illegal cigarettes, as the fines are hefty.

Under the Tobacco Tax Act, unless otherwise authorized, it is illegal to buy, possess or distribute any quantity of untaxed cigarettes or any other untaxed tobacco products.

Smoke shacks unto themselves are not illegal. Indigenous Canadians living on reserve are allowed to buy tobacco products tax-free there, however non-indigenous Canadians are not legally allowed to buy any tax-exempt cigarettes.

That said, the practice is widespread, as taxes make up about 70% of the purchase price. A carton of cigarettes in a c-store costs about $120, while you can buy a carton on a reserve for about $35. While this represents a significant cost-savings to the individual, it also represents billions in lost tax revenue for society.

“Our fear is most will return to the reserves or have the underground delivery model revived post COVID-19,” says Bryans, adding he is “hoping manufacturers will work to keep the prices down, with no increases and offer levels of value brands to help c-stores retain this new customer base.”

He points to studies that show contraband accounts for 30-35% of all tobacco sales – in areas closer to reserves, that number spikes as high as 65%.

While it is hard to compete with the massive price differences between legal and illegal sales, c-stores operators have proximity and the law on their side.

Operators and their teams would be well-advised to take advantage of the current situation by getting to know customers’ and their smoking habits. Fulfilling a customer’s wants and needs in a friendly (legal) exchange, will no doubt help build and maintain those relationships and sales once travel restrictions subside and communities open up.

Educating customers is a key component in reducing illegal sales and driving smokers back to c-stores, says Bryans. “The OCSA has met with Ministry of Finance to discuss an educational component on how reserve products are illegal and hurt every community.”

Ontario delays new vaping regulations

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Ontario’s Ministry of Health is hitting pause on a series of new vaping regulations that were to come into effect on May 1.

The implementation of the new regulations, which have far-reaching effects on the convenience sector, will now be delayed until July 1, giving all parties time to make adjustments while also dealing with the business impacts of COVID-19.

“We commend the Ontario government for listening to our concerns regarding the May 1st deadline to remove vaping products from our stores which was not feasible or in the public interest,” says Anne Kothawala, president & CEO of the Convenience Industry Council of Canada. “Major inventory operations, like pulling vape products from our stores, require employees and third-party representatives to meet, travel and have contact with each other all which would have run contrary to guidelines requiring social distancing.”

In a statement, Dianne Alexander, director Health Promotion and Prevention Policy and Programs Branch, Office of the Chief Medical Officer of Health, Public Health Ministry of Health, said: “The government understands that some of the proposed amendments would require certain businesses to remove inventory from their stores, which may involve contact with others. Providing more time to implement would allow owners and employees of affected businesses to practice physical distancing.”

Among the regulatory amendments under the Smoke-Free Ontario Act, 2017, the following rules are considered a blow to the convenience industry:

Restricting the retail sale of flavoured vapour products to Specialty Vape Stores and Cannabis Retail Stores, except for menthol, mint and tobacco flavours.
Restricting the retail sale of high nicotine vapour products (>20mg/ml) to Specialty Vape Stores.

C-stores will have until July 1 to sell out or return to suppliers their existing inventory of higher nicotine and flavours that fall outside the new regulations.

While the industry welcomes the extension, they are critical of the province’s overall decision, which puts more power in the hands of unregulated vape shops.

At the time of the announcement, Health Minister Christine Elliott unveiled a number of measures, which were presented as an effort to curb youth vaping.

“As we learned more about the alarming increase in youth vaping, one thing has become abundantly clear: we need to do more,” Elliott said, citing recent studies suggesting use of vaping products among young people surged 74% in the past year. “Indeed, the early evidence is quite concerning.”

However, industry associations are “disappointed” in the strategy, saying the efforts are misguided and do little to address the youth vaping crisis. The consensus is convenience stores, which already sell age-restricted products, such as tobacco, alcohol and lottery, are in an ideal position to sell vapes and accessories.

READ: Industry reacts to Ontario’s proposed vaping regulations

“The entire vape consultation has not been well thought out,” says Ontario Convenience Stores Association CEO Dave Bryans. “Any person buying cigarettes must come into a convenience store and they would purchase their brands in different strengths like light, low tar etc. If they are thinking about moving to a safer alternative, like a vape product… then they should have the option to choose one of the three flavours in the strength of nicotine they are accustomed to. Failing this they will most likely continue to smoke and we don’t see everyday tobacco customers sourcing out a vape shop. The vape shop consumer is a flavour addict using fruity flavours and can option for any strength they desire in tanks or specialty units. C-store customers want to have a pod in a easy-to-use format, not the complications of what a vape store offers.”

The OCSA says it will continue pushing the government to allow for three strength levels of nicotine.

“There may be a marginal number of customers morphing to the vape shops, but I see more of a new black market of flavours from all over the world being available online to everyone,” adds Bryans. “Today, and even with the present legislation, no one has considered the online sales issue, nor have there been any strict age testing requirements at the door to verify the purchaser being over 19.”

While both the CICC and OCSA vow to continue discussions with the government, for the moment c-store operators should start planning around the July 1 deadline.

“Independents should start rationalizing slower moving brands and start educating their customers of the potential changes,” says Bryans, who recommends operators work with suppliers to mitigate the change. “They also still have the option to call their MPP and speak out about this unfairness and potentially sending tobacco smokers to another unproven channel with no track record.”

“At a more appropriate time, CICC will continue to express our concerns about the proposed vaping regulations which will fail to solve the problem of youth vaping,” says Kothawala, “But right now, we will continue to focus on our vitally important role to ensure that Canadians are well supplied with their daily needs during this crisis.”

Canada, convenience and COVID-19

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As Canadians work together to flatten the curve during the COVID-19 outbreak, the convenience industry is working to meet the needs of Canadians. After all, this is a business where working from home isn’t an option and customers rely on their local c-store for basic supplies and more.

Across the country, some retailers, bars and restaurants are closing temporarily or reducing hours. The situation is fluid province to province and, as we discovered, from business to business, as c-stores balance meeting the needs of customers with protecting staff and public safety.

The Convenience Industry Council of Canada released a statement yesterday saying its members are committed to keep Canada’s convenience stores up and running, as long as it is safe for owners, staff and customers.

“It is critical that consumers have access to basic necessities and our convenience store industry is committed to that,” says Anne Kothawala, president and CEO of the CICC, adding the organization has a COVID-19 working group that is focused on sharing best practices such as increased sanitization procedures. “That includes all high-touch areas like checkouts and cooler doors. For their part, our distributors are also working around the clock to ensure shelves remain stocked.”

CICC has developed a best practices document, which is posted on its website. Here is a link to the Federal Government’s Economic Response Plan as it relates to small business operators.

As of March 20, nine provinces and the three territories have declared a state of emergency or public health emergency. In many cases, these provinces have explicitly identified convenience stores and gas stations as essential services.

On March 17, Ontario enacted a State of Emergency, closing restaurants (except take-out), bars and venues of 50 people or more. At the moment, convenience stores may stay open. Those that offer foodservice are closing dining areas and offer take-out only.

On March 19, Vic Fedeli announced the province moved to ensure trucks could deliver goods to stores day or night, without worrying about municipal noise by-laws.

On March 23, both Ontario and Quebec ordered the closing of all non-essential businesses.

In a statement, CICC told is members it “has been directly in touch with Premiers’ and Ministers’ offices and has been assured that the convenience and gas supply chain is an essential service.”

Around 8 p.m., the Province released its list of essential businesses, including convenience stores.

“The OCSA continues to advocate to serve in every community and work with our members to continue the flow of goods to every town, city and village. It is a privilege to be opened during these unknown times,” said CEO Dave Bryans.

The Ontario Convenience Stores Association is calling on operators to rally in the face of the outbreak: “The convenience store channel must show leadership and disciplines on the cleanliness of our stores.”

The association has created window signs that operators can print and post in store and at entrances. Link here.

The Atlantic Convenience Stores Association reached out to its members March 17. “We have been invited to join a working group consisting of business associations in Nova Scotia and the Nova Scotia Department of Business. The purpose of the working group is to communicate concerns of small business to government and to be able to receive up-to-date briefings.” The goal is to create similar groups in other Atlantic provinces.

In a statement, president Mike Hammond said: “Many business operations have been negatively impacted and we will be advocating on your behalf for assistance and relief from governments.”

Independent operators take it day by day

Meanwhile, operators across the country are working hard to keep customers engaged and feeling confident about service levels.

For instance, Leslieville Pumps in Toronto, which is famous for it’s barbeque, has “increased the amount of time that staff are sanitizing” and is even offering to run orders out to people’s cars. Many other small stores and restaurants in its east-end neighbourhood have already closed.

PopBox Market in Toronto’s west end is open (as of publishing), but reducing hours: “Our suppliers are still operating and the food supply will continue to be replenished.”

Alcona Esso is open for business.

Meanwhile, outside the city, Alcona Esso in Innisfil, Ont. told followers on Twitter: “Don’t worry, we will remain open.” Staff are shown wearing latex gloves to help guard against the spread of germs.

In the face of the outbreak and social isolation, independent retailers, like many small business owners across the country, are making difficult decisions.

On March 17, Enniskillen General Store, which operates four locations in Ontario, had closed its Port Perry store and two more closures were the in the works: “We have made the very painful decision to sell our milk, eggs, & packaged ice cream today & then we will close our Oshawa & Bowmanville locations. Our main Enniskillen will stay open as a way to serve our community up there. We will not be scooping any individual ice creams.”

Clearview Co-op in Alberta has a dedicated Coronavirus Info page on its website. As a precaution, its South Junction Co-op will close its dining area and provide take out only beginning March 18th.

In Saskatchewan, Humboldt Co-op announced its Humboldt and Lanigan Food Stores will open one hour early to accommodate seniors and others who are compromised due to health conditions.

Most retailers are closed self-serve food bars.

What are the chains doing?

Larger chains are also closely watching the situation and acting accordingly.

On its website, Rabba Fine Foods said: “Rabba Fine Foods is always open 24/7 to serve you, no matter what. We are well stocked with all items including dairy, bakery, fresh produce, health and wellness products and toiletries.”

In a statement, the company explained: “Our stores employ certified food handlers who are taking precautions to ensure we sanitize and limit risks, based on Government Guidelines.”

On March 23, the company announced it was installing checkout barriers at all 34 of it stores.

Meanwhile, Norman Hower, VP & GM, 7-Eleven Canada, which operates 636 stores across the country, said in a statement the company has “enhanced our standards and procedures for hygiene, hand washing, sanitation, food handling and preparation in stores, and increased the frequency of cleaning high-touch surfaces. We are in communication with federal and provincial health agencies and officials. We are reviewing updates from the World Health Organization; and we are sharing guidelines from the Public Health Agency of Canada with stores.”

In addition, 7-Eleven is:

Alerting employees to the importance of staying home if individuals have any symptoms of the COVID-19 illness or if they feel sick.
Displaying hygiene posters in high-traffic areas in stores.
Temporarily discontinuing the use of personal cups for hot and cold dispensed beverages.
Working with vendors and suppliers to stock stores with high demand, essential products and making them easy for you to find.
Demonstrating to you and the communities we serve that we are here to provide quality products at fair and honest prices.

The c-store operator is asking customers to only shop if they are feeling well, pointing out that it now offers delivery to more than 11 million Canadians through the UBER Eats and Foodora delivery apps.

“We’re committed to providing you with what you want, when and where you want it. We’ve been a leader in the convenience industry in Canada for 51 years, and we’ll keep working hard every day to earn your trust and your business,” said Hower.

In a call with analysts on March 18, Alimentation Couche-Tard CEO Brian Hannasch said the retailer’s experience positions it well to meet the challenges from COVID-19: “When we’ve experienced these types of situations in the past, if you think about hurricanes, floods, etc., our industry has played a key role in helping our communities get through these situations, and we’ll attempt to do the same here.”

He notes there is higher demand for some items such as water, tobacco products and (in some areas) beer, as customers stock up, but no material issues with its supply chain.

The Quebec-based company said it has contingency plans if stores are forced to close, reduce hours or face labour shortages.

“So right now, we expect to remain open. However, we do have plans where we’ve identified sites that we would close and transfer employees to make sure that we keep our most strategic sites open in the event of running short of available team members,” he said. “One of the benefits of being global is we’re able to share information and best practises and learnings across our business units and apply the lessons we learn in Europe to our North American businesses.”

READ: Hurricanes and floods have prepared Alimentation Couche-Tard for COVID-19.

On March 24, Couche-Tard announced via Twitter it was increasing pay by $2.50 an hour for all Canadian hourly employees.

As of publishing, Parkland had not responded to inquiries about how the companies are handling the situation at stores across Canada. However, we will update as information becomes available.

Safety measures and supplies

Across the country, many stores are no longer accepting cash, opting instead for debit and credit payments only to reduce hand-to-hand contact.

While all industry-related shows are cancelled, postponed or moving online, the industry is still robust and supplies are getting through to retailers.

In a statement from CEO Pat Carey and president Dan Elrod, Wallace & Carey said it “has been preparing for this unfolding situation since it first began to develop and we are positioned to assist your company with the many unforeseen challenges you may face as a result of it.”

The company has a continuity strategy in place designed to mitigate potential interruptions. “As circumstances change, we continue to adapt our protocols to address the safety of our people, our customers and others with whom we work. All of our distribution centers are open for business. If there is a possibility of any changes to the delivery of your orders we will notify you immediately; however at the moment there are no disruptions.”

Efforts include:

We have assembled a Pandemic Response Team to ensure that all safety and health obstacles that could occur as a result of the virus are addressed swiftly. This team is set up to meet daily and provide updated reports.
Our contractual and branch janitorial teams have heightened their cleaning protocols and frequency in all our distribution centers.
We have provided to all our distribution centers, up to date information on virus protection and prevention and it is posted on all our communications screens.
We have implemented enhanced protocols for our drivers to ensure their safety and our customer’s safety.
We have suspended all non-essential travel for our company.
We have launched an online COVID-19 information center where teammates can send their questions and concerns to Info@wacl.com and our project response team will send a response to them within 24 hours.

CN, which delivers goods by rail across the country, said that while it “continues to monitor and proactively respond to the developing COVID-19 pandemic…. there are no interruptions to our service caused by COVID-19 and we continue to operate very efficiently.”

“Together we can keep the supply chain to Canada’s consumers open and functioning effectively,” says Kothawala, adding all stakeholders are closely monitoring updates from national and provincial health authorities to ensure that the industry responds to recommendations in a timely manner: “As this very challenging situation evolves, we will quickly adapt and share new learning on preventative measures that will ensure reliable and safe customer service.”

CICC also reports is has received confirmation that governments are “focusing on regulations that are necessary to deal with COVID-19. Regulations pertaining to files such as vaping or consumer packaging are on hold.”

Convenience Store News Canada will work to keep you up-to-date on industry-related news – follow our social media feeds. The Public Health Agency of Canada is the most reliable resource for information. You can visit the PHAC’s website or follow on Twitter. Also, closely monitor provincial Ministry of Health sites for the latest directives. Links to provincial sites here.

Hurricanes and floods have prepared Alimentation Couche-Tard for COVID-19.

Ontario and Quebec order non-essential businesses to close

7-Eleven adding up to 20,000 new positions

Rabba installing glass barriers at checkout

OLG shares best practices for lottery sales during COVID-19 pandemic

C-stores deemed essential businesses in Ontario

How is your business responding to COVID-19?

Contact CSNC editor Michelle Warren at mwarren@ensembleiq.com or tag us on social media @CSNC_Octane

Industry reacts to Ontario’s proposed vaping regulations

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Move called a blow to c-store operators

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Industry associations at the national and provincial levels are up in arms over Ontario’s new plan to restricting the sale of flavoured vapes and e-cigarettes in convenience stores.

Last week, Health Minister Christine Elliott unveiled a number of measures designed to curb youth vaping (READ: It’s official: Ontario to ban flavoured vapes). The proposed rules, which are expected to come into effect May 1, include restricting the sale of flavoured vape products to specialty vape and cannabis retail stores (products with menthol, mint and tobacco are to be exempt). In addition, vapour products with nicotine levels higher than 20 milligrams will be limited to specialty stores, which are supposed to only serve customers 19 and older.

However, industry associations say the efforts are misguided and fail to address the youth vaping crisis. In addition, the consensus is convenience stores, which already sell age-restricted products, such as tobacco, alcohol and lottery, are in an ideal position to sell vapes and accessories.

Despite having no evidence to suggest that youth are accessing vape products from convenience stores, the government is discriminating against them while allowing specialty vape shops and online retailers to continue to operate unchecked, says Anne Kothawala, president and CEO of the Convenience Industry Council of Canada. “Convenience stores are regulated, experienced and trusted, yet the government is handing a monopoly to vape shops that have flouted the law for years. In Ontario, we pass mystery-shopping tests at a rate of over 96%. In addition, 87% of convenience stores passed Health Canada compliance tests while 80% of vape shops failed.”

Kothawala pointed to a recent study—”2019 Drug use Among Ontario Students Report”—from the Centre for Addiction and Mental Health (CAMH), which shows that convenience stores are not a significant source of vaping products for youth (READ: C-stores not a major source for youth vaping: Study).

“This government promised that it would make evidence-based decisions but are instead favouring appearance over substance which will have no effect on youth vaping,” said Kothawala.
In addition, studies show that many adults use vaping products to wean themselves off of tobacco products. Kothawala noted that the proposal to reduce nicotine concentrations would force many of these adult vapers back to cigarettes. “Our industry sales data shows that 80% of adult smokers who switched from tobacco to a reduced risk product chose a flavoured option with a nicotine concentration that matches that of a cigarette. While we fully support any efforts to combat the increase in youth vaping, restricting the ability of convenience stores to offer the products that our adult customers need to successfully quit smoking is not only misguided, it is dangerous public policy.”

The Ontario Convenience Stores Association also came out swinging, unleashing a firestorm on Twitter criticizing the government’s decision. “The world of vaping needs to be controlled like tobacco as it is a nicotine delivery product. Every store selling vape needs the same consistent rules on age testing, handling, authorized adult flavours & strict penalties. Not different stores with different rules.”

OCSA president Dave Bryans also spoke to the issue during his remarks at The Convenience U CARWACS Show on March 3, saying retailers should be “outraged” and that the association will continue to work with the province to shape vaping regulations that are more fair to the convenience industry.

The Ontario Korean Businessmen’s Association (OKBA), which operates www.saveourstores.ca, said in a release it is “bewildered and extremely disappointed” by the province’s decision, calling it another “blow” to the reputation and bottom line of the convenience industry.

“Our members have been responsibly selling e-cigarettes and vaping products for many years and we work closely with our members to ensure minors cannot buy them in our stores,” said Kenny Shim, OKBA spokesperson and King Street West storeowner. “If government is truly concerned about vaping, they are targeting the wrong retail outlet in convenience stores. To think minors aren’t purchasing from vape shops is extremely naïve…. Our members were excited when the Ford government was elected in 2018. We didn’t expect this government to follow the previous Liberal government’s habit of picking winners and losers. What happened to, Open for Business??”

The province’s previous Liberal government was set to implement similar measures that would have kicked in last July, but the Progressive Conservatives paused those regulations shortly after taking office in June 2018. However, under increasing pressure to address youth vaping in the wake of growing health concerns, on January 1, Ford’s government banned the promotion of vaping products in convenience stores and gas stations.

In addition to the latest regulations, Elliott, who stopped short of implementing a provincial tax on the products, suggested the federal government should consider doing so: “We know that young people are more price sensitive than other consumers. Higher prices would also further deter youth who have never smoked from trying vapour products in the first place.”

Industry associations are calling on all levels of the government to consider the evidence and work closely with the convenience industry before moving ahead with any decisions.

“There is still time to implement policies that will work. But until the government addresses online sales and vape shops, the policies that have been proposed will not meet the outcomes that the government is suggesting they will,” said Kothawala. “The convenience industry has a plan that will actually address the issue of youth vaping and we encourage government to work with us to get this right.”

With files from Canadian Press.

Ministry provides update on beer and wine in Ontario c-stores

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After much initial fanfare, the Ontario Government’s commitment to bringing to bringing beer and wine to corner stores appears to be going nowhere fast.

In March 2019, Ontario’s then-finance minister Vic Fedeli announced the province would keep its election promise and was moving ahead with an expansion of beer and wine sales in corner stores, big box stores and more grocery stores. The move was meant to reduce prices, prevent any potential privatization of the LCBO and give consumers more choice.

He made much ado about the fact that Ontario has the lowest density of retail outlets selling beer, wine, cider and spirits in Canada, with less than 3,000 outlets selling alcohol (compared to Quebec’s approximately 8,000).

Things were off to a strong start. In May, the Progressive Conservative government tabled legislation that would terminate a contract with The Beer Store and pave the way for putting beer and wine in corner stores. The move was designed to avoid massive financial penalties of $1 billion or more for breaking the contract, which was meant to extend through 2024 and upheld The Beer Store as the sole retailer of 12 and 24 packs of beer.

Needless to say, the Beer Store – the majority of which is owned by industry giants Molson, Labatt and Sleeman – reacted quickly, criticizing the move and saying it would lead to massive job losses.

Still, in June Progressive Conservatives MPPs seemed confident and even took to Twitter en masse, decrying the lack of choice for beer-drinking Ontarians and celebrating the idea of introducing beer, cider and wine to the province’s local stores.

At the time, it seemed like the move was imminent, a virtual done deal. Seven months later and it feels like the issue has fallen off the radar.

The last time the government addressed the issue publicly was during an interview in August with the Toronto Sun when new finance minister Rod Phillips said the province was still working towards a deal.

“It’s becoming more available, but we’re going to do that in a responsible way and we’re doing that,” Phillips said, referring to the new LCBO Convenience Outlets opening across the province.

Still, that’s a long way from beer and wine in every corner store, which was the initial battle cry.

The Ontario Convenience Stores Association addressed the recent lack of momentum in its latest newsletter: “We are sure many are disappointed with the slow down on the roll out of beer and to the convenience store sector and want to assure everyone that this government is still committed to the channel and customer convenience for beer and wine.”

The Convenience Industry Council of Canada is also working with the government to move the issue forward.

Convenience Store News Canada contacted the Ministry of Finance for an update on the situation, asking about potential timelines and the status of discussions with stakeholders.

Ministry spokesperson Marc Pichette confirmed “the Province is currently in discussions with The Beer Store and the brewers that are parties to the master framework agreement. The discussions are aimed at reaching a mutually agreeable solution to improve customer choice and convenience. We cannot disclose the details of these ongoing discussions.”

While a timeline was not available, he added the government is “moving forward on the promise to improve customer choice and convenience and enable more opportunities for businesses in the sale and distribution of alcohol. This is something we’re committed to bringing to the people of Ontario as soon as possible.”

Thirsty for change: Q&A with OCSA CEO Dave Bryans

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As CEO of the Ontario Convenience Stores Association, which represents more than 7,500 stores, Dave Bryans is a driving force in the quest to sell beer and wine in the province’s corner stores. Convenience Store News Canada caught up with the industry veteran to talk about what he sees as the biggest change and opportunity shaping the convenience sector in Ontario.

“We’re losing five convenience stores a week, but we’re about to experience a whole new world of opportunity with the provincial government’s approval of beer and wine.”

What is this going to look like?

DB: There are different ways of alcohol being sold across the country, but this will be more like the Quebec model where eventually every convenience store in Ontario will be able to sell beer, local craft beers and, of course, wines. Think of the millions of people that are standing in line in the Beer Store or LCBO; they will soon be standing in convenience stores and have the opportunity to buy all types of impulse items, from chips to new products to lottery and more—it will open up a whole new world of traffic. In Quebec, beer represents about 15% of total sales, but also influences about 30% of impulse sales.

How can the industry adapt to take advantage of these opportunities?

DB: We need everybody to stay focused and work together to ensure that beer and wine ends up in every convenience store. We’ve been waiting since 1987 for this and finally it looks like it’s going to go through. But it’s still going to take the support of the retailers, the convenience sector and the manufacturers.

What needs to happen to make this work?

DB: A few things. One is distribution: How do we get smaller loads of beer, wine and cider to convenience stores? We’re trying to work with full-service wholesalers and convince the government that this might be the route to go. Add it to regular delivery load—instead of letting the Beer Stores or the LCBO make those deliveries exclusively at a higher cost—because we have thousands of communities in Ontario that have to be covered. If we want strong and vibrant wholesalers, we need to push to have them carry the beer as well. They do that in England, Ireland and Scotland.

There are a lot of unanswered questions about the rollout: Which stores get it first?

DB: I believe the Conservative government is leaning towards key independents because they’re a small-business minded government.

How does a retailer prepare for and manage this?

DB: We have to talk about everything from what the cooler is going to look like to category training. A lot of people think it’s moving the Coke over and sticking Coors in the cooler. It’s not that simple—there are many steps. The OCSA has had discussions with the federal government on the allocation of the promised $1.2 billion of grant money for small businesses—with refrigeration grants covering up to 50% of costs, it will allow us to expand our cold vault to accommodate future beer sales, while not unbalancing our total beverage category.

This will require a major overhaul to make way for new products.

DB: Everyone’s going to have to look at their store and say, “How do we rationalize products we don’t need?” The centre of the store is very expensive real estate that probably represents 10% to 15% of the total sales—most sales either come from the cold vault, the lottery terminal or the front counter with its impulse purchases. The rest is sort of fill in, so how do we look at the store of the future? What do you merchandise next to the beer? And how do you get your impulse items rearranged in your store to create sales opportunities? If you look at the well-run disciplined chains like 7-Eleven, they already have a nice foodservice programme. Maybe independent convenience stores will be able to get enough capital by having beer to actually do that too.

What else must be in place for this to work?

DB: Certification and training. How are we going to train 78,000 people to handle alcohol and build confidence that we can do it as well as we do with the tobacco file? We’re working quietly with the government on a programme called Smart Age and we’ll be able to tell more about it as it moves forward.

What are the biggest concerns from independents?

Screen Shot 2019-09-24 at 10.48.14 AM DB: How it will look. We’re working with the Ontario Craft Brewers and with the local wineries to start educating retailers on what to expect. Craft beer is the lead on this: There seems to be a real movement in Ontario, especially with Millennials, to craft beer. And that’s what our channel desperately needs, the next generation of shoppers.

What are you doing to ensure smaller operators can compete against the big players?

DB: We have a recommendation in to ensure that everybody adheres to a minimum price structure, not a maximum, a minimum. So that will not allow for predatory pricing by big chains, or by big brewers. Convenience stores will never be able to sell beer if everybody is under pricing them. So we’re saying to the government, “You should have some type of responsibility when it comes to minimum pricing.”

And the timeline—how do you see this playing out?

DB: I hope we’ll get the ribbon cut by late fall or early next year for the first wave of stores and then we’ll be able to announce some type of larger rollout, perhaps 500 c-stores.
This interview originally appeared in the September/October issue of CSNC.

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