Quality employees and customer service are the backbone of the convenience store and petroleum industry. All you have to do is observe how top quartile companies treat and respect their personnel to understand what kind of asset frontline employees can be to a successful company. It’s no accident that these operators are outperforming their competitors across all retail channels.
But the game is poised to change in a big way with the rollout of President Obama’s Patient Protection and Affordable Care Act (ACA). Under the ACA, retailers with 50 or more full-time employees are struggling with the mandate that will require them to provide health insurance coverage for individuals who work 30 hours a week.
As a result of this costly piece of legislation, many c-store chains (and all retailers with hourly wage employees) will have to completely rethink their staffing strategies. This is going to impact all aspects of the busines: hours of operation, customer service, product prices, capital investments, acquisitions and much, much more.
While it’s too early to predict how Obamacare will impact the convenience store industry, I think I can safely say it won’t make anyone’s life easier. It’s also safe to say that whatever waning confidence in Obamacare that retailers did have went out the window in November when President Obama infamously declared, “We fumbled the rollout on this new healthcare law.” But the rollout is still moving full steam ahead.
Certainly any time you have businesses across the country hiring fewer people and laying off current employees, it can’t be good for the economy in general. So setting aside the bigger picture questions like, “What impact will unemployment and higher costs have on the overall economy?” convenience store retailers need to be asking themselves right now what they can do to keep attracting customers because this could get ugly. Higher costs and a smaller staff to provide your customers the outstanding service they expect from you is hardly an ideal situation.
But we have faced ugly before and c-stores have always found a way to overcome it. The government has come after tobacco, runs stings on alcohol, wants onerous foodservice labeling restrictions, advocates the creation of more unions and backed the greedy credit card companies in the fight against interchange fees. Healthcare is going to have to fall in line behind the rest of these idealistic, overbearing and overreaching pieces of legislation.
Among the major causes for concern is that retail employees “do not fit neatly into full and part-time categories and compliance with the unprecedented levels of change under the ACA will be particularly challenging,” E. Neil Trautwein, vice president and employee benefits policy counsel of the National Retail Federation (NRF), told CSD’s Associate Editor Marilyn Odesser-Torpey as part of this month’s cover story (p. 28). NRF is one of the trade organizations that have been closely engaged in the regulatory process ever since the ACA was signed into law.
C-store chains are already speaking up. Employees of Baltimore-based Royal Farms said they have already been told that the company is opting to make almost its entire workforce part-time as a result of the Obamacare full-time employee coverage requirements.
According to Trautwein, there is still continuing dialogue on Capitol Hill about the 30-hour full-time work week and bi-partisan interest in returning it to 40 hours. There is also an effort to change the definition of a “large” company from 50 employees (one that would have to provide healthcare coverage to 30-hour-per-week workers) to at least 100. Whatever the outcome, this administration’s past actions make it clear it will not be skewed to benefit retailers. Prepare with a plan now to preserve your brand and your personal connection with the customers. Service is the backbone of the industry and it can’t be compromised.