Susser Talks Heathcare 'Headwinds'

Gallup poll: Nearly half of small businesses expect Affordable Care Act to be bad for business

Samantha Oller, Senior Editor/Fuels, CSP

CORPUS CHRISTI, Texas -- During Susser Holdings Corp. and Susser Petroleum Partners LP's first-quarter 2013 earnings call, president and CEO Sam Susser talked "bullishly" about new growth, new programs and new competition. But he also talked about new costs, especially for healthcare.

He described "a consumer environment that is feeling the pinch of higher payroll taxes and employers that are feeling uncertain with the impact of healthcare reform next year."

Susser said that the rollout of the Affordable Care Act is going to create headwinds for all retailers in 2014.

When pressed by an analyst to quantify his company's impact, the executive said there were no solid estimates yet, but he described it as in the "millions of dollars--it's not tens of millions of dollars." He noted that it will be driven by direct healthcare expense increases and pressure on wages because of "shifts in the workforce."

"Workers are going to have to move from basically being with one company to holding down two to three jobs," he said. "The way the rules are being created, there's this unintended consequence that's going to put pressure on employees and companies. We want to take care of our tenured store employees that are great at customer service, great at delivering food--we don't want to run them off because of the way we go about implementing the letter and spirit of healthcare reform."

Susser Holdings is a third-generation, family-led business based in Corpus Christi, Texas, that operates more than 560 c-stores in Texas, New Mexico and Oklahoma under the Stripes banner. Restaurant service is available in approximately 355 of its stores, primarily under the proprietary Laredo Taco Co. brand. Susser Holdings also is majority owner and owns the general partner of Susser Petroleum Partners LP, which distributes more than 1.4 billion gallons of motor fuel annually to Stripes stores, independently operated consignment locations, c-stores and retail fuel outlets operated by independent operators and other commercial customers in Texas, New Mexico, Oklahoma and Louisiana.

Galluping Healthcare Costs

Meanwhile, a separate Gallup poll conducted in early April found that 48% of U.S. small-business owners say the Affordable Care Act is going to be bad for their business, compared with 9% who say it is going to be good and 39% who expect no impact.

Similarly, 52% of owners say the Affordable Care Act is going to reduce the quality of healthcare they and their employees receive. This contrasts with 13% who feel it will improve the quality of care their employees get and 30% who see no impact. And 55% of small-business owners expect the money they pay for healthcare to increase; 5% expect their healthcare costs to decline, while 37% say the health law will have no impact on what they pay for healthcare.

When asked if they had taken any of five specific actions in response to the Affordable Care Act, 41% of small-business owners say they have held off on hiring new employees and 38% have pulled back on plans to grow their business. One in five (19%) have reduced their number of employees and essentially the same number (18%) have cut employee hours in response to the healthcare law. One in four owners (24%) have thought about eliminating healthcare coverage for their employees.