Dying stores morph into smoke shops

When convenience stores across Canada were forced to cover up their cigarette displays by “power wall” legislation, their sales sank. But some businesses in New Brunswick have found a novel way to fight back. They’re doing an end run around the laws banning tobacco displays by shutting their doors to kids and getting licences to convert their convenience stores into smoke shops.

Canadian Convenience Store Association president Dave Bryans says it’s “a desperate move” by a sector that’s suffering through a huge crisis. The combination of a nasty recession plus tobacco advertising legislation has dealt a lethal blow to the stores, and they’re doing whatever they can to survive. New data shows that during the past seven months, 1,875 independent stores across Canada have closed. In Ontario, 765 have shuttered since May, wiping out a full 12 per cent of independents. In Alberta, 223 have closed; in New Brunswick, 58. “The small business model is in true jeopardy,” says Bryans.

Convenience store owners can generally apply to become smoke shops if tobacco sales account for more than half of their business. Tobacco typically accounts for 35 to 75 per cent of their sales, so many stores already qualify. As long as they agree to bar underage customers, such stores are exempt from power wall legislation in most provinces.

Still, while trading pop and chips for cigars and pipes may prevent some independents from going under, “you’re not going to be seeing a wide base of stores running away from their everyday business,” says Bryans. Instead, he says most independents are trying to diversify by adding hot food or a coffee bar. If anything, he says, the power wall legislation uncovered a fundamental weakness in the sector, he says. “Most retailers have relied too heavily on tobacco throughout their whole business lives.”