PHILADELPHIA -- New tobacco-permitting rules put in place late last year by the Philadelphia Department of Public Health may have led 7-Eleven to drop plans for 35 new franchised convenience stores in the city, according to the Philadelphia Inquirer and Daily News.
Intended to reduce the number of tobacco sellers in low-income neighborhoods, the regulation limits the number of new permits to one retailer per 1,000 residents, taking into account daytime commuters. It will also prohibit new tobacco permits for retailers operating within 500 feet of a K-12 school.
To accomplish that goal, the city may deny permits to stores when the current owner sells the business. With tobacco being 25% to 50% of a 7-Eleven store's gross revenue, depending on location, the value of the current owner’s business could drop dramatically, according to the report.
Health department spokesman James Garrow said the city “understand(s) some retailers might be negatively impacted,” the newspaper reported.
The report went on to say that more than half of the 60 7-Eleven stores open in the city are located in these newly designated zones. The new standards could affect up to 1,500 small retailers. As a result, Manzoor Chughtai, president of the Huntingdon Valley, Pa.-based 7-Eleven Delaware Valley Franchise Owners Association, said 35 new 7-Elevens will not be coming to Philadelphia, the newspaper reported.
7-Eleven officials did not confirm the decision to forgo Philadelphia expansion to CSP Daily News by press time.
Another c-store retailer, Wawa Inc. was a high-profile detractor of the permitting rule as it made its way through the city government, ultimately influencing lawmakers to include daytime commuters when considering population density. The Wawa, Pa.-based chain runs its own c-stores, so the new permitting rule would not affect its business in the same way as a single-store owner or franchisee would.