Summer’s just begun, and no doubt you’ve not only been working your stores but also tending to weeds and greening your lawn.
No worries. I’m here to catch you up on the news cycle. It’s hard to believe, but there’s more to life than just Donald and Hillary. In competitive news, two branded icons have introduced some interesting new retail concepts.
But first, some bad legislative news. The Obama administration rolled out a dramatic expansion of overtime pay that is expected to make more than 4 million U.S. workers now eligible for OT.
The new rules, released in May by the Labor Department, more than double the annual salary threshold—from $23,660 to $47,500—for which businesses can deny overtime pay. So a salaried convenience-store manager, for instance, making $14 an hour, or roughly $30,000 a year, will now be eligible for time-and-a-half for extra hours worked.
The move is considered to be a smack against fast-food restaurants and service-sector channels, including convenience. Predictably, pro-labor groups cheered the move as a win for workers, while business reps predicted that many companies will simply circumvent the rule by turning salaried positions into hourly roles.
“These rules are a career killer,” said David French, senior vice president for the pro-business National Retail Federation.
“You don’t make money in the gas business anymore.”
Expect this issue to be part of a much more significant narrative thread—income stagnation and wealth distribution—that will dominate the presidential and Congressional races this fall. This will make Mitt Romney’s 47% comment seem like something from “Sesame Street.”
Speaking of new regulations, tobacco soon will not be the only retail category to feature a medical warning. A federal district judge gave the go-ahead for San Francisco to become the first U.S. city to require a warning label on ads for beverages with sugar.
The ruling is a major blow to the American Beverage Association, which challenged the law.
Jurist Edward Chen said in his ruling, “Plaintiffs are not likely to succeed on the merits of their First Amendment claim, and it is unlikely that they would suffer irreparable harm if the ordinance were to go into effect.”
So starting July 25, all billboards and ads for sodas and other sugary drinks will now feature the following caution: “WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay. This is a message from the City and County of San Francisco.”
How sweet. Not.
On the retail front, Sheetz and McDonald’s grabbed headlines for what they chose not to include in their latest stores. Speaking before a local rotary club, Louie Sheetz said the 510-store family-run Sheetz chain is contemplating more stores without gasoline.
“You don’t make money in the gas business anymore,” said Sheetz, who is a director on the company’s board. “Our future is in a new format, which is the Sheetz ‘convenience restaurant’ that can operate independently of gasoline sales.”
A year after opening a 15,000-squarefoot, gasoline-free restaurant and grocery store on the campus of West Virginia University [CSP—July ’15, p. 34], the company is unveiling a second similar format this summer.
One incentive for the decision is Pennsylvania state law forbidding retailers from selling both gasoline and beer. The new Sheetz format will be classified as a restaurant.
“Beer sales are a very integral part of our business model in other states,” Sheetz told the rotary club. “We know our customers in [Pennsylvania] would love to see beer in stores. It’s just a matter of finding the right political approach to do so.”
And fresh on the heels of its 24-hour breakfast boom, McDonald’s is trying something new in the Northeast. Looking to get rid of lines, the QSR giant has opened a store with only drive-thrus and a walk-up window in Northern Jersey. It has no indoor seating.
“This test restaurant model in Jersey City is a part of McDonald’s ongoing efforts to meet the needs of our customers by offering a convenient and quick alternative for commuters on the go,” a McDonald’s spokesperson told CSP. “This no-seating model has been implemented as a test in specific markets across the country.” The site is about 2,200 square feet, significantly smaller than its typical 3,000- to 4,000-square-foot formats.
And if you’re thinking about long lines, think again: The site will feature two drive-thru lanes. I wonder how many Happy Meals they’ll sell under this format.
Mitch Morrison is vice president and group editor of Winsight’s Convenience Group. Reach him at mmorrison@winsightmedia.com.
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