News Briefs

OTTAWA - A small business group is calling on the federal government to freeze upcoming increases to Canada Pension Plan and employment insurance premiums.

The Canadian Federation of Independent Business says the higher payroll deductions planned for the new year will reduce the take-home pay of Canadians at a time when inflation is already eroding spending power.

The group says few small employers are in a position to increase wages to offset rising premiums.

It says businesses are also facing higher premiums, which could leave many struggling to meet even their existing payroll budgets.

Dan Kelly, president of CFIB, says worker employment insurance and pension contributions could increase by as much as $304.71 next year.

He says that's money Canadians could use for groceries or utilities at a time when the rising cost of living is squeezing household budgets.

- The Canadian Press

WASHINGTON (AP) - The Supreme Court on Monday refused a request from tobacco companies to stop California from enforcing a ban on flavoured tobacco products that was overwhelmingly approved by voters in November.

R.J. Reynolds and other tobacco companies sought the high court's intervention to keep the ban from taking effect by Dec. 21.

There was no additional comment from the justices and no noted dissents.

The ban was first passed by the state legislature two years ago but it never took effect after tobacco companies gathered enough signatures to put it on the ballot. But nearly two-thirds of voters approved of banning the sale of everything from cotton-candy vaping juice to menthol cigarettes.

Supporters of the ban say the law was necessary to put a stop to a staggering rise in teen smoking.

R.J. Reynolds filed a federal lawsuit filed the day after the Nov. 8 vote, but lower courts refused to keep the law on hold while the suit proceeds.

Menthol cigarettes make up about a third of the market in California, the companies said in urging the Supreme Court to keep them from losing so much business in the nation's largest state.

They argued that the authority to ban flavoured products rests with the federal Food and Drug Administration.

California responded that federal law comfortably allows state and local governments to decide which tobacco products are to be sold in their jurisdictions. And the state noted that the companies only went to the Supreme Court after spending ``tens of millions of dollars'' in a losing cause at the polls.

California will be the second state in the nation, after Massachusetts, to enact a ban prohibiting the sale of all flavoured tobacco products. A number of California cities, including Los Angeles and San Diego, have already enacted their own bans, and several states have outlawed flavoured vaping products. So far no legal challenges to those bans have prevailed, but the companies have an appeal pending at the high court in their fight with Los Angeles.

It's already illegal for retailers to sell tobacco to anyone under 21. But advocates of the ban said flavoured cigarettes and vaping cartridges were still too easy for teens to obtain. The ban doesn't make it a crime to possess such products but retailers who sell them could be fined up to $250.

In addition to menthol and other flavoured cigarettes, the ban also prohibits the sale of flavoured tobacco for vape pens, tank-based systems and chewing tobacco, with exceptions made for hookahs, some cigars and loose-leaf tobacco.

-The Associated Press

MONTREAL - Dollarama Inc. recorded another strong quarter as inflationary pressures continue to drive consumer demand for consumable products at the discount retailer.

The Montreal-based retailer raised its comparable-store sales growth guidance Wednesday as it reported that its third-quarter profit and sales were up compared with a year ago.

During a call with analysts, Dollarama's chief financial officer J.P. Towner said the retailer saw a third consecutive quarter of "higher than historical demand'' for consumable products, a category that includes food as well as items such as laundry detergent that can only be used once.

"Canadians from all walks of life continue to seek value in lower prices on the goods they need,'' he said.

The company cited current economic conditions as a significant factor in the demand from new customers as food prices have increased faster than overall price growth figures through much of the year, peaking with 11.4 per cent increase in August.

During the call, Dollarama's chief executive officer Neil Rossy said convenient store locations and low costs will retain the discount retailer's new customer base.

"Our value promise and a high inflation environment is even more relevant as consumers juggle the pressure on their wallets and adjust their spending strategies,'' said Rossy.

As Dollarama, traditionally known for prices between $1.25 and $2.50, continues to stock additional items up to $5, Rossy said the rollout has gone as planned and the company has yet to receive negative feedback regarding the higher prices.

Rossy said while the company would like to have a $1 offering for each category, in some cases it is not possible due to the cost of raw materials and higher prices from domestic vendors.

"I can't control, even though I would love to, what our vendors come in with as far as cost,'' he said.

The chief executive said the company will continue "fighting the fight'' in regard to purchasing and managing the cost, especially that of domestically purchased goods.

The financial pressures placed on Dollarama are the same as every other Canadian retailer, said Rossy.

The discount retailer opened 18 new store locations in its third quarter for a year-to-date total of 41 net new stores.

"We expect a busy Q4 on the real estate front and remain on track to reach our full-year target of 60 to 70 net new stores,'' said Rossy.

Dollarama announced Wednesday that it had signed a deal to buy three contiguous industrial properties in Mount Royal, Que., near its centralized logistics operations and next to its distribution centre for $87.3 million.

The company plans to redevelop the site to support its future logistics and warehousing needs.

"This will provide us with additional flexibility to support our long-term logistics needs as we pursue our target of 2,000 Dollarama stores in Canada by 2031,'' Rossy said.

RBC Dominion Securities Inc. analyst Irene Nattel said in a report that the company's third-quarter results reflect Dollarama's "strong value positioning for consumers, particularly sought after in the current high inflation environment.''

Dollarama reported earnings of $201.6 million or 70 cents per diluted share for the 13-week period ended Oct. 30, compared with a profit of $183.4 million or 61 cents per share in the same quarter last year.

In its guidance for the year, Dollarama says it now expects comparable-store sales growth for its current financial year to be in a range of 9.5 to 10.5% compared with earlier expectations for a range of 6.5 to 7.5%.

The company also narrowed its guidance for its annual gross margin as a percentage of sales to a range of 43.1 to 43.6% compared with earlier expectations for a range of 42.9 to 43.9%.

Sales for the quarter totalled $1.29 billion, up from $1.12 billion a year earlier.

Comparable-store sales rose 10.8% as the number of transactions climbed 10.3% and the average transaction size gained 0.4%.

-The Canadian Press

THUNDER BAY, ONT. - The doors were locked and closure signs were posted on two Circle K stores in Thunder Bay's south end last week.

Both the Northern Avenue/May Street and Simpson Street/Pacific Avenue stores were shuttered.

Greg Mitchell, manager of security and loss prevention with Circle K, Central Canada Division, says the move to close the stores was a marketing decision.

"As we continue to refine the Circle K experience for our customers to ensure a consistent experience from store to store, we sometimes make strategic decisions to close or sell stores that no longer fit well with the direction of the brand based on store size, configuration, trade area, local market strategy or other related factors,'' he said.

Mitchell explained they made the business decision to close their two Thunder Bay south side Circle K stores based on an ongoing strategic review of their local operations in Thunder Bay.

"We'll look forward to serving our valued local customers in the area and continue to look for opportunities to bring the Circle K experience to convenient new locations as we continue growing our brand in the area,'' he said.

Meanwhile, there is no talk of any other convenience or variety store business set to open in either location.

WINNIPEG - Food delivery app SkipTheDishes has named Howard Migdal as its new chief executive officer.

The Winnipeg-based company says Migdal, who previously served as Skip's chief operating officer, will replace Kevin Edwards.

Edwards led the company for the last five years and is due to retire.

He took over as CEO from Skip's founders in 2018 with a mandate to grow the company, but spent much of his tenure focused on navigating the COVID-19 pandemic and launching Skip Express Lane convenience and grocery stores.

Migdal was one of the co-founders of GrubCanada, a national food delivery platform, and has 16 years of experience in the food business.

He has worked for Skip for four years, starting as its managing director of Canadian operations.

-The Canadian Press

OTTAWA - Statistics Canada says retail sales fell 0.5 per cent to $61.1 billion in September led by a drop in sales at gas stations along with food and beverage stores.

However, the agency says its initial estimate for October pointed to a gain of 1.5% for the month, though it cautioned the figure would be revised.

For September, Statistics Canada says sales at gas stations fell 2.4% as prices fell, while sales at motor vehicle and parts dealers were relatively unchanged.

Sales at food and beverage stores dropped 1.3% in September, as supermarkets and grocery store sales fell 1.6 per cent and convenience stores lost 1.5%. Sales at building material and garden equipment and supplies dealers fell 2.0%.

Core retail sales - which exclude sales at gasoline stations and motor vehicle and parts dealers - fell 0.4% in September.

In volume terms, retail sales fell 0.1% per cent in September.

-The Canadian Press