Captains of the Industry
Retailers weigh in on legislation, weather woes and the evolution of their business.
Retailers weigh in on legislation, weather woes and the evolution of their business
Q: What is your biggest legislative concern?“
”Renewable identifi cation numbers [RINs, which has todo with biofuels and the required amount mandated inthe nation’s supply by the EPA]. You’re going to see an explosion in cost due to gas pricing and high gas prices.”—Kyle McKeen, CEO and president, Alon Brands Retail, Dallas; 300 locations
“The cost differentialin channel pricing.In times of crosschannelblurring, we’reabused. … Channelpricing continues tobe prejudicial, andunfortunately so. Itdoesn’t make sense.”— Gus Olympidis, CEO and president, FamilyExpress, Valparaiso, Ind.;
“ On the state level, the state of Minnesota is facing a pendingtobacco-tax increase—a really sizable one—that’s going torange anywhere from 95 cents to $1.60 per pack.“We are a growing company … so at some point soon we’ll be subject to menu-labeling rules. The rules are writtennow to say you’re subject to the menu labeling rules if 50%of the square feet in your store is allotted to food, but they’reincluding the packaged products. It doesn’t make any sense.”— Jared Scheeler, director of retail operations,Bobby & Steve’s Auto World, Eden Prairie, Minn.; seven storesMinn.; seven storesMcKeenScheeler
Q: What’s the biggest changeyou’re introducing this year?
“We’re going to be ... jumping with both feet intoa loyalty program. What loyalty programs offer is ameans to communicate directly with our consumersand customize our message to them. ... So having thetechnology in place to do that, with our multiple profi tcenters, we believe will be a home run for us.”—Scheeler58 stores
Q: How is business going in 2013?Will it be better than 2012?
“Weather had an impact on our business. We had such a warm springlast year—in the ’70s and ’80s. This year, we had snow on March 26.Gas sales were fl at to down. For 2013, I’m not optimistic it will be better.There’s too many factors coming into play, drug store [competition], theeconomy. … If there’s calm winds, for 2014-2015,I see improvement.”— Ron Freeman, president of Jay Petroleum Inc./Pak-a-Sak, Portland, Ind.;Dallas; 34 stores
“In our c-stores, 2012 was the biggest growth yearwe’ve ever seen. We saw double-digit growth for thefi rst time ever as a company, and it seemed as soon as2013 hit, we saw the expiration of the Bush tax cuts, wesaw gas prices at a high level and, in Minnesota, it’s stillkind of wintery.“It has been a slow start to 2013 ... [but] I’m prettyoptimistic about the rest of the year. It seems we’re apretty resilient industry and when we do go throughrough stretches, we seem to bounce back, one way oranother.”—Scheeler
“Fuel margins are a bit better, buta couple of categories have beenstruggling, especially packagedbeverages. The biggest challenge around packaged beverageshas been deep discounting by drugstores. We’ve seen $2.50 12-packs.And the weather this year has beenmuch different from last year. …But as April started, we’re startingto see improvements.”— John Zikias, director of marketing,Holmes Oil/Cruizers, Chapel Hill,N.C.; 41 stores
Q: How are you preparing for the Affordable Care Act?
“ We’re going contrary to industry trends. We areexpecting to hire full time, and expecting to … pay for it by building a better mousetrap. One dramatic opportunity for us is energy. We think we can pay for 70% of Obamacare. We do not employ part-time people. We’re a living brand so transient workers are not our type of employees.”—Olympidis
“ We haven’t made any final determinations on how we’re going to handle the transition in 2014 regarding health care. ... Our expenses for healthcare under the Affordable Care Act will increase drastically. Anytime you see a large increase in a single line-expense item in one year, obviouslysomething’s got to give. We still have to make that determination in terms of what we may have to cut.”—Scheeler
“We’re self-insured, but want to understand the implications for Obamacare. We’re godfathered in for a lot of areas. We’reconcerned about the 30-hour rule and how to manage it. We’re still asking questions.”—Freeman