Incoming chairman promotes advocacy as he prepares to battle swipe fees, fuel standards and tobacco regulations in the year ahead.
By John Lofstock, Editor.
Renowned author and business strategist Tom Peter once said, “Leaders don’t create followers, they create more leaders.” When it comes to the challenges facing the convenience store and petroleum industry over the next few years, it is strong leadership that will guide marketers through the onslaught of regulations threatening retailer profitability.
Enter Tom Robinson.
Robinson, president of San Jose, Calif.-based Robinson Oil Co., is the incoming NACS chairman. While his industry experience is extensive, it’s his passion for advocacy and grooming the industry leaders of tomorrow that will benefit a generation of NACS members.
Robinson’s first association involvement was more than 20 years ago lobbying and testifying on tank regulations at the local, then state level. That led to his involvement with the California Independent Oil Marketers Association, and later to the national association SIGMA, where he ultimately served as president.
And, while Robinson has always been passionate about advocacy, the ability to learn best practices and share ideas as a NACS member has become more important. “Participating in associations has been great for me and for my business. It’s fun being part of a group, and organization, that is so focused and so disciplined in its pursuit of providing value,” he said.
Today, Robinson Oil operates 34 Rotten Robbie convenience stores in the San Francisco Bay area. Robinson is a third-generation retailer whose children are actively engaged in the business. He said that much of the foundation of his understanding of business and the industry came just by being around it, whether as a kid spending the day on the job with his father and grandparents or as a teen operating a station that sold a paltry 200 gallons per day.
Robinson sat down with Convenience Store Decisions to discuss his upcoming term as NACS chairman and the issues facing convenience store and petroleum marketers in the year ahead.
CSD: The convenience store industry seemed to stand apart from other retail channels in attacking swipe fees. What does that say about the resolve of industry retailers and the influence of NACS? What is the next step in fighting swipe fees?
TR: All retailers, not just convenience retailers, have been hit with the high swipe fees and the monopolistic practices of banks and credit card companies. We see these practices as abusive, unfair and too expensive. I think that convenience retailers certainly have a heightened awareness of these unfair practices. For example, fuel is such an important part of what we do and fuel margins are typically low. This is a volume business. We tend to calculate our margins in pennies per gallon so retailers realize that at times the swipe fee is greater than their fuel margin.
As a retailer, I am grateful that NACS has the resources and the expertise to wage such a monumental battle against the banks and the card companies. But going forwarded we have a big battle on our hands. We are moving forward with legal action against the Fed on the debit fees and there’s an anti-trust law suit against the card companies that’s going on as well. This promises to be an enormous industry issue for years to come.
CSD: How important is retailer advocacy for NACS? What kind of a difference can retailers make at the local, state and federal levels?
TR: It is absolutely critical that retailers get involved in the legislative processes at any level they can. There is strength in numbers and when retailers have a heightened awareness of the issues that are threatening their businesses they are much more likely to be committed to the cause. One of the strengths of NACS is that we have strong grassroots support. We have members operating in every congressional district. That’s a strong base. The challenge for us is being able to mobilize our assets. All you have to do is look at how the banks, credit unions and card companies stepped up to oppose swipe reform to understand how strong of an opponent we are up against. There is a big opportunity in front of us to be better than we have been in the past.
CSD: Do you think the convenience store industry’s strong grassroots efforts to push through swipe reforms caught the banking industry by surprise? Will the battle be more difficult this time around?
TR: There’s no question that this industry made a statement that the banking industry had not received in the past. We definitely got their attention. One advantage we had was that there were a lot of folks going after the banks from a lot of different directions, so they were fighting multiple battles. We were only focused on one of those issues, but when all was said and done, I think it was the one they were most unhappy losing. Swipe fees are a golden goose for credit card companies because they have such monopolistic power and the ability to make a significant amount of money from them.
CSD: Like swipe fees, tobacco has been scrutinized for some time. Do you expect the industry to see a drop off in tobacco sales going forward or can the category continue to persevere in convenience stores?
TR: Tobacco remains an important category to convenience stores and our adult customers. There is no doubt the category is changing with FDA control, but I hope the agency is smart enough not to go down the prohibition route because, as we’ve seen with alcohol, that strategy just doesn’t work. It creates opportunities for smuggling, tax evasion and a host of other issues that don’t address the government’s primary stated objective of preventing youth smoking.
With that said, retailers have to figure out how we are going to deal with the FDA because there are some folks within the FDA that would like to convince people to quit smoking altogether. We need to recognize that and plan our future accordingly. That means other categories like foodservice take on greater importance.
CSD: Among the key reasons tobacco taxes keep increasing is to fund programs to restrict youth access to tobacco. As a result of higher tobacco costs more and more consumers are buying tobacco from Native Americans or over the Internet where taxes aren’t collected. How can c-stores compete with this?
TR: This is not a new phenomenon. It happens with more than just tobacco where legitimate retailers are essentially punished for complying with the rules, yet others are circumventing the laws and profiting. It’s hugely frustrating and it tends to make you pretty angry. In this case it seems as if the regulating body just doesn’t care about the fairness aspect when it comes to dealing with responsible retailers. In an effort to control tobacco all they have done is created an uneven playing field that benefits the tobacco shops that don’t abide by their rules.
CSD: Convenience store retailers currently sell 80% of the country’s motor fuels, but the fuel industry is changing. What is the next step for industry retailers? Should they be investing in renewable fuels, electric charging stations, etc.?
TR: That is the $64,000 question. I personally think the transition from petroleum to something else will be slow. I don’t think there is anything we need to rush out and do tomorrow, but there are some things we can be doing like following the trends in the automobile industry.
These trends will give us some creative ideas when it comes to testing and experimenting with new concepts. For example, when building a new store it might be a good idea to see if there are some federal dollars to put in an electric charging station, E-85 or some sort of biodiesel. This isn’t the drastic shift some analysts are predicting, but it makes all the sense in the world when we talk about being prepared for the future.