"Not many make it because the U.S. has a bit more competition than in Canada, but these guys did, and it speaks to the quality of their management and the strength of their track record."
Analyst Martin Landry on Alimentation Couche-Tard (pg. 18)

A recent study of more than 500 college students found that only 21 percent were able to use their smartphone to scan a QR code. Many of the students did not understand that, in most cases, scanning QR codes requires a smartphone app.
Source: Archival

Several months after successfully getting debit card transaction fees capped, retailers are taking aim at credit card transaction fees. Five million retailers have filed an anti-trust lawsuit against Visa, MasterCard and 13 large banks (including Bank of America and Citigroup) over the 2-percent interchange fees they charge retailers on credit card transactions.

The case, which will be heard by Judge John Gleeson of the U.S. Eastern District, is set to start in September. The outcome could cost the defendants billions of dollars and force them to lower the fees, according to a recent report by The Street.

Estimates of the potential cost of a settlement of the antitrust case vary dramatically — from a few billion dollars into the hundreds of billions, media reports have stated. Deutsche Bank research found that a settlement or judge's ruling could take the 2-percent interchange fees banks and card companies charge retailers on credit card transactions to as low as 0.5 percent. That would equal the rate in Australia, but still be higher than the 0.3 percent charged in the European Union, according to a report by Sanford Bernstein analyst Rod Bourgeois.

A Jan. 4 report by Deutsche Bank analyst Matt O'Connor said reducing credit card interchange fees by 75 percent would cost US Bancorp about $1.2 billion of its 2012 revenues — some four times O'Connor's estimate of revenue the bank lost from the Durbin Amendment. For JPMorgan Chase, the implied cost would be $5.38 billion, more than five times the $1 billion the bank lost to Durbin, according to O'Connor's estimate. For Bank of America, the implied cost would be $3.68 billion, nearly double the $1.9 billion O'Connor estimates the bank lost to Durbin.

Citigroup, essentially unaffected by Durbin, would take a $3.02 billion hit if credit card interchange fees fell to 0.5 percent, the news outlet reported.

The plaintiffs in this case include NACS and the National Restaurant Association. The suit argues that the banks, Visa and MasterCard have illegally colluded to charge fees for credit card transactions that are far higher than an open, competitive market would dictate they should be.

Ten individual plaintiffs, including The Kroger Co., Walgreen Co. and some other large chains, have opted out of the class, and MasterCard stated in its latest quarterly earnings filing that it has made "substantial progress" in settlement talks with these plaintiffs. However, they represent less than 5 percent of the purchase volume of the class plaintiffs, and "there has not been similar progress," with the class plaintiffs, whose settlement demands "remain unacceptable" given the size of the monetary demands and "unacceptable changes to MasterCard's business practices," the company stated in its quarterly filing.

Eye on Growth

• 7-Eleven Inc. acquired retail interests in 51 Texas ExxonMobil sites. All of the purchased sites are located in the greater Dallas/Fort Worth area and will retain the Exxon gasoline brand.

• Swiss Farms is preparing to open its first stores in North Carolina in March. The new stores are part of the drive-thru chain's expansion into the Northeast after four decades of doing business in Pennsylvania.

• QuikTrip expanded its next generation store format to Wichita, Kan., after testing it in Dallas and Kansas City. The new format features outdoor seating, fresh food and a latte bar with drink servers.

• VPS Convenience Store Group acquired seven central Illinois Colonial Pantry convenience stores from Miller Oil Co. that it will operate as Village Pantry stores.

• Kum & Go will launch a major expansion in the Pikes Peak and Colorado Springs region of Colorado starting early this year. It expects to invest $70 to $80 million and build 20 to 25 stores over the next five years, resulting in approximately 150 new jobs by the end of 2013.

• Clarks Brands LLC plans to aggressively expand westward this year, entering states such as Texas, Arizona and New Mexico for the first time. Its strategy also includes a refined payment processing service that includes a check processing program and a multi-store gift card option.

• Fikes Wholesale Inc., parent company of CEFCO Convenience Stores, acquired 63 Taylor Food Mart stores from Taylor Petroleum Co.

Wawa celebrated the grand opening of its first Baltimore store, and its first location in the Mid- Atlantic region to feature its new prototype design. The new store — the 40th to be built in Maryland — offers in-store bake-off and fullservice specialty beverages.

• Delek US Holdings Inc. is in the middle a "massive" company initiative to reimage and build new convenience stores, primarily under its MAPCO Express brand. It has reimaged 43 percent of its approximately 400 c-stores and plans to renovate another 25 locations in the near future.

• More c-stores sold in the fourth quarter of 2011 vs. the same quarter in 2010, but at much lower prices, according to BizBuySell.com data. Overall, 46 c-stores changed hands in the fourth quarter of 2011, compared to 40 in the same quarter a year before. The median asking price for convenience stores in Q4 2011 was $175,000, with the median sale price coming in at $145,000, By comparison, the median asking price for the fourth quarter of 2010 was $299,500, with the median sale price coming in at $282,000.

In Memoriam

• Bosselman Cos. Chairman Chuck Bosselman, 67, lost his battle with cancer on Jan. 7. Remembered as a "true leader among leaders" and the visionary of the company, Bosselman was a second-generation business owner. His father, Fred, founded the company's first location in 1948. Bosselman became general manager of the Grand Island Interstate 80 Bosselman Truck Stop in 1967, and is credited with shaping many of the practices truck drivers find standard today. For instance, Bosselman Travel Centers were among the first to offer showers, movie theaters and fast-food restaurants within a truck stop. Bosselman was recently named the winner of the NATSO Hall of Fame award and was to receive the honor this month at the 2012 NATSO Show in Las Vegas.
  
  
• George Helow, founder of the Zippy Mart chain, passed away Jan. 17 at the age of 90. He began his convenience store career in 1960, eventually owning 370 stores and taking the head leadership role at NACS in 1977. His tenure as NACS president came at a time when the association was transitioning and growing its annual meeting. He became president at the 1976 annual meeting in Atlanta, the first meeting with a full-fledged expo. His president's address a year later was considered one of the best ever delivered at a NACS closing banquet. As NACS entered its 16th year, Helow's speech, "Sweet Little Sixteen," compared the maturation of the industry to that of a person and was hailed as "a prescient look at the industry's future."

Competitive Watch

• Dollar stores are on a roll. Consumers are shopping the channel even more than Walmart. One analyst said he believes consumers prefer shopping at dollar stores because they are "so broke and busy, they can't afford the gas and time required to shop at big-box discounters, which are often located on the edge of towns." In related news, Dollar General said it will build 625 new stores this year. The company also plans to remodel or relocate an additional 550 locations and open a distribution center in California.

• Taco Bell is now offering a breakfast menu at 750 locations in 10 states. Called "First Meal," the effort by the quick-service restaurant chain is an attempt to grab a piece of the rapidly-growing breakfast category. Breakfast now accounts for 12 percent of annual restaurant sales, or $42 billion annually, according to Technomic data.

• Burger King Holdings Inc. is testing home delivery service at 16 locations in Virginia, Maryland and Washington, D.C. Deliveries come with a surcharge of $2, and customers must make a minimum order of $8 to $10, depending on the market, the chain's website states. It is unknown if Burger King plans to expand home delivery nationwide.

• Delhaize America will close 113 underperforming Food Lion locations. The retailer will also retire its Bloom banner altogether; convert 64 Bloom and Bottom Dollar Food stores in Maryland, North Carolina and Virginia to Food Lion stores; close seven underperforming Bloom stores and six underperforming Bottom Dollar Food stores in overlapping Food Lion markets; and convert one Food Lion store in Florida to a Harveys store.

• Dunkin' Donuts intends to double its U.S. store count in the next 20 years, according to media reports. Once completed, Dunkin' will have more than 14,000 stores. The chain now controls about 23 percent of the U.S. coffee and snackshop market, while Starbucks holds a 32.6-percent share with its 11,000 U.S. locations.

Retailer Tidbits

• Fortune magazine ranked QuikTrip Corp. as No. 66 on its "Top 100 Best Companies to Work For" list for 2012. Other recognized retailers were Wegman’s Food Markets (No. 4), Whole Foods Market (No. 32), Starbucks (No. 73) and Publix Super Markets (No. 78).

• Mansfield Oil Co. created two different entities with the official launch of a new holding company, Mansfield Energy Corp., which will oversee service divisions such as Fuel Systems & Services. Mansfield Oil will be responsible for all refined product sales and marketing.

• Hess Corp. will ramp up its capital expenditures by 21 percent this year in an effort to find and produce new sources of petroleum. It will spend nearly all of its $6.8 billion capital and exploratory budget on exploration and production.

• Sunoco Inc. has added its Craft Beer Exchange to 30 more APlus convenience stores in New York State. The program offers customers a choice of up to 12 rotating craft beers available in to-go, 64-ounce growlers or custom bottle six-packs.

• Getty Petroleum Marketing Inc. (GPMI), which filed for Chapter 11 bankruptcy protection in early December, was ordered to pay $12 million to Getty Realty Corp. by Feb. 5. The U.S. Bankruptcy Court, Southern District of New York, ruled that GPMI owes that amount in unpaid rent per its master lease with Getty Realty.

• Wawa joined with other area employers to found the Greater Philadelphia Business Coalition on Health, a regional coalition to improve the health benefit spending for its members by improving health care quality and safety, and reducing health care costs.

• RaceTrac Petroleum also opened a new prototype store in Acworth, Ga., last month. The location offers free wireless Internet, indoor and outdoor seating, expanded food and beverage offerings, a frozen yogurt bar and a walk-in beer cave.

Marketing Moves

• Seventy-six percent of consumers say retailers do not communicate with them often enough, according to the IBM Institute for Business Value 2011 Retail Industry Study, released last month. The 28,500-plus consumers in 15 countries who were surveyed during a six-month period in 2011 did note that retailers do one thing really well: branding. Seventy-two percent of respondents said they’re aware of retailer branded products.

• Kum & Go is asking its coffee drinkers to "Get a Little Crazy" by creating their own recipes using a mix of the chain’s Java Ridge coffee and cappuccino flavors. From Jan. 1 to Feb. 25, coffee drinkers can submit their recipes through the contest’s microsite page for a chance to win an iPad 2.

• The Pantry Inc.’s Kangaroo Express stores are celebrating the college basketball season by offering collegiate-themed coffee mugs for sale. The 16-ounce reusable mugs are available at most store locations for $2.99 each while supplies last, with refills of Bean Street Coffee and other hot beverages offered for 99 cents.

• Members of the RV owner’s organization Good Sam Club can now save at Pilot and Flying J travel centers with the new Good Sam Club Pilot Flying J RV Plus Card. Benefits include savings on each gallon of gasoline and diesel fuel purchased; a 10-centper- gallon discount on bulk propane; and a 50-percent discount on holding tank dump station charges at all applicable Pilot Flying J locations across the United States.

• Cumberland Farms has teamed up with the Boston Celtics to give lucky fans the chance to earn $25,000. As part of the "Cumberland Farms Take-a-Shot" contest, contestants will be randomly selected to participate in a three-point-shot contest on the parquet floor at the TD Bank Garden in Boston during 10 home games.