What Happened in Vegas?

C-stores expect slot, cigarette revenues to drop

LAS VEGAS -- Cries of an uneven playing field are being heard from convenience store, restaurant, bar and tavern operators in the Las Vegas Valley, reported the Las Vegas Business Press. They say they are faced with economic hardship after the passage of Question 5 imposed strict limits on smoking in businesses other than casinos.

The measure essentially prohibits smoking in restaurants and bars where food is prepared and served. The only exception is for bars that serve snacks or prepackaged foods. Convenience markets and grocery stores must also go [image-nocss] smoke free on December 8.

Geno Hill, president of the Nevada Tavern Owner's Association and owner of five local bars, told the newspaper that some bars will have to rethink their entire business model. Locals casinos are going to get the lion's share of some bars' clientele now, he added.

Putter's, with several locations in town, including some that have contractual agreements with separate restaurant owners, will likely close all its kitchens and terminate up to 150 employees, said the report.

Mike Berry, Putter's director of operations, told the paper the hit to the local economy will not be slight. We have a $3 million payroll that will be cut down by $2 million. That's $2 million out of the local economy. And we are a small company. Multiply that by a thousand and you have a lot of money that's out of the local economy. That's going to hurt, he said, adding that he's also heard from concerned food-industry vendors, including appliance dealers and point-of-sale businesses, who anticipate a decrease in future demand for restaurant products.

Putter's also was in the planning and development stages at three new locations. All those plans are on hold, Berry said.

A considerable number of Nevada's 767 c-stores depend on slot routes to make their operations profitable, National Association of Convenience Stores (NACS) spokesperson Jeff Lenard told the Business Press. Many of our stores derive 40% of their gross revenue from slots.

C-stores in the rest of the country have turned toward food, but Las Vegas is different. Unlike the rest of the country, Vegas has cheap buffets that are plentiful, so food isn't really an option to grow sales, but gambling is, said Lenard. It will be more challenging because gamblers may want to smoke.

And according to the report, c-stores are reeling on two fronts: Voter approval of Question 5 and its smoking restrictions, and the passage of Question 6, which hiked the minimum wage by a dollar, to $6.15 per hour. \ Nevada Petroleum Marketers Association president Peter Kruger told the paper, there's a lot of angst out there.

Because c-stores typically lease their slots from slot-route operators, gross revenue-sharing agreements are in place, Kruger added. Most of the contracts are written so if the revenue goes down, the operator's percentage goes up, potentially cushioning the impact of Question 5.

In the days following the election, some c-store owners didn't realize what had hit them yet. Doesn't it have to be voted on by the [Nevada] Legislature? City Stop owner John Athey asked, according to the paper. It's not a law. City Stop owns and operates 10 stores in Las Vegas.

Athey said he had already covered his outdoor areas with awnings that would make it easier for his customers to smoke. But he feared cigarette sales would drop because of the ban, lamenting it's just another assault on our business.

Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.


Exclusive Content


Battling Lottery Theft in Store

Scratcher tickets an increasing source of retail losses

Company News

Three Bears Alaska Acquires 6 Stores

Sourdough sites just right for convenience/grocery retailer


22nd Century Group Reduces Roles as It Explores Strategic Alternatives

Low-nicotine cigarette maker sells VLN product in some c-stores


More from our partners