MONTREAL -- Squeezed by challenging economic conditions, one of the most significant industries in Canada is also hit by regulation abuse, poor policies and a lack of political leadership against never-ending issues such as contraband tobacco and excessive credit-card transaction fees. These combined factors have had "a devastating effect" on the convenience store industry's profitability, resulting in 350 store closures last year alone, according to the 2011 Annual Report on the c-store industry, prepared by HEC Montreal on behalf of the Canadian Convenience Stores Association ([image-nocss] CCSA).
"Year after year, we come to the same conclusion: governments must wake up to its convenience stores industry. At the moment, we have the worst of both worlds: either they are not enforcing their own laws or they are simply ignoring situations that make no sense," said CCSA senior vice president Michel Gadbois, "If we want to retain the local family business model and maintain an essential channel to reach Canadian consumers, governments must do more--and better--to improve our business conditions," he said.
Every day, 10 million Canadians visit a c-store. That is no surprise since 70% of the population live within a 0.5-km radius of a c-store. The little corner store, so handy and friendly, hardly suggests the significance of the retail industry in Canada and its powerful contribution to the economic vitality of the country: $33.8 billion in annual sales, $2.2 billion in annual wages and 185,000 jobs, as well as contributing to governments up to $16 billion from taxation and sale of controlled products. These are enormous sums that show the benefits the industry has to all Canadian communities.
In 2010, sales at c-stores without gas stations were stable compared to 2009 (0.1%), totaling $11.2 billion, while those with gas stations saw an increase of 9.2% to $22.6 billion, with gasoline prices increasing by 9.7% and volume by 10.1%.
The industry's overall sales of $33.8 billion were up 5.9%, with the strongest growth in Alberta, Quebec and Ontario. Overall margins were only 1.6% for convenience stores without gas stations and 0.9% for those with gas stations.
Faced with these challenges, the CCSA is calling upon the industry to unite and make the voice of c-store owners heard even more forcefully across the country. "In each federal riding there are, on average, 70 convenience stores. There's no denying we constitute a considerable political force. If we mobilize, the federal and provincial governments will have no choice but to listen and act to protect the unique institution that is the convenience store," Gadbois concluded.
The CCSA represents the economic interests of more than 25,000 c-stores located in every community in Canada serving Canadians for all their daily needs. CCSA has developed a basic mission to promote corporate social responsibility and represent "Responsible Community Retailing" and has developed the We Expect ID age testing program for all employees in the network. CCSA works to promote and foster professional business practices, standards and ethics throughout the c-store industry and provides training, education and guidance to its members.
The CCSA's 2010 report said some progress has been made in curbing sales of contraband tobacco in the centre of the country though more needs to be done, added a report by the QMI news agency. Smuggled tobacco results in lost sales of about $850 million a year, it said.
The association also called for the ability to sell alcohol in corner stores. "Our network has clearly shown it can control product sales to minors in an exemplary fashion," the report said. "Every percentage of market share in this environment would result in $150 million in sales for convenience stores."
The group added its voice to many other Canadian small businesses calling for a reduction in credit-card transaction fees, said QMI. Two Vancouver-based law firms last month filed a class-action lawsuit against MasterCard, Visa and Canada's biggest banks for allegedly conspiring to fix credit-card fees. Branch MacMaster, one of the law firms involved, said those fees cost Canadian merchants $5 billion in 2009 alone.
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