Lorne Russell, owner of Russell’s Ultramar in Blaketown and Mike Hammoud, president of the Atlantic Convenience Stores Association, speak with reporters at the Holiday Inn in St. John’s on Monday. — Photo by Ashley Fitzpatrick/The Telegram
The president of the Atlantic Convenience Stores Association (ACSA), Mike Hammoud, says it is up to the provincial government to save the small businesses. He claims stores are being financially pressed into closure by existing provincial legislation.
“We’ve called this press conference to bring light to a situation where many convenience stores in this province are struggling and more stores per capita are closing than anywhere else in the country,” he said, speaking Monday at the Holiday Inn in St. John’s.
Hammoud said a total of 92 convenience stores closed up shop in 2009-10. He said he did not know if a similar number of closures would be seen this year, but felt the number is likely to remain high.
“Our profits are being squeezed because many of our largest selling products including gas, lottery and beer have margins set and controlled by government agencies. The margins rarely, if ever, increase,” he said.
“At the same time, government legislative costs go up every year.”
On top of the list of costs are legislated increases in minimum wage.
“Between October 2008 and April 2012, Newfoundland and Labrador’s minimum wage will have increased 25 per cent, from $8 an hour to $10 an hour.
“Convenience store owners want employees to earn as much as they possibly can, but they cannot afford to absorb these continual, annual increases while their margins remain frozen,” he said.
Hammoud said there have been no increases for retailers on lotto margins since 1982. On beer sales, he said a “slight” increase earlier this year, of 12 cents per case, is not enough. It’s “almost less than half the margins in Quebec, which would be the other province in Canada that has the ability to sell beer.”
He said stores in smaller areas need better margins to remain viable.
“Newfoundland has a smaller population base per business. So it is very, very important they strive at maintaining certain margins to stay in business.”
Lorne Russell owns Russell’s Ultramar in Blaketown. He was with Hammoud, speaking on behalf of ACSA members and in particular members in rural areas. “The thing I find a bit frustrating is we can’t afford to pay our employees enough to keep them,” he said.
The provincial Department of Finance did not agree with the assessment that government actions were the problem.
“Currently (on lotto sales) retailers get a five per cent commission based on their total sales of Atlantic lottery product, a $0.10 encashment fee each time they pay a prize of any amount and they also receive a retailer’s prize worth one per cent of a validated prize valued $10,000 or more that they sold in their store,” stated a spokesperson with the department in response to questions late Monday.
“With regards to beer sales, on May 1 of this year, the commission paid to convenience stores increased by 8.7 per cent. Since 2006, the commission has increased by 18.75 per cent.”
He called the May hike “perhaps the largest one-time increase ever.”
“We receive many requests from various groups as part of the normal budget process and particularly during the time of an election and we must balance all requests we receive with our obligation to ensuring the public purse is managed effectively,” he stated.
The spokesman said margins on gas sales are negotiated by retailers with suppliers.
For a change in lotto margins, all four provinces would have to become involved. Yet, for now, the ACSA wants this province to take the lead, and make whatever changes it can to help.