Industry CEOs Concerned As New Issues Emerge

the SN STAFF

The estate tax and credit card interchange fees remain top concerns for supermarket chief executive officers interviewed by SN, although other issues, such as immigration and sustainability, have become more prominent.

“I think we'll see more efforts, both positive and negative, to incentivize the industry regarding sustainability,” said Al Plamann, CEO of Unified Grocers, Los Angeles. “Business always reacts better to positive incentives than to penalties, but there are still people who think they must harm business to get its attention.”

He also said he thinks more government action on health care reform is in the works.

“I think there's enough interest in doing something at the state and national levels that something ought to emerge in 2008,” he said.

Bruce Weitz, CEO of Kings Super Markets, Parsippany, N.J., said he's concerned that legislative initiatives in New Jersey concerning plastic bags could raise costs, as could other proposals in the state concerning paid family leave.

At the national level, he said, adding layers to the current food safety system also could make it more expensive to operate supermarkets, adding to the rising costs of energy and credit card interchange fees.

“We have the best food safety system in the world, and we're going to have to add to that,” he said.

Mike Byars, CEO of Minyard Food Stores, Coppell, Texas, also said he sees food safety as a major national issue in the year ahead, although locally, he added, immigration is a bigger concern. He said his chain's business, which largely focuses on Hispanic consumers, has been negatively impacted by fears of crackdowns on illegal immigrants.

“There's a real push in Texas to limit illegals by putting pressure on people who rent to them,” he said. “For us, we make sure the people who work for us are legal, but it's impossible for us to know who's shopping with us.”

Interchange fees and the estate tax have been perennial concerns for operators, and some expect action may be taken this year on the former.

“I'm hopeful that something positive gets accomplished on interchange rates,” said Rich Niemann Jr., CEO of Niemann Foods, Quincy, Ill. “It appears we have gotten the attention of Congress, and hopefully they give the issue a serious look.”

The estate tax is also a concern, especially for small operators, said Jeff Reasor, CEO of Reasor's, Tahlequah, Okla.

“Someone with just a couple of stores could have a pretty big estate when they retire, and I don't think it's fair that the government should tax that all away,” he said. “I know Warren Buffet is for it, but there are not too many of us in his tax bracket.”

He projected that the issue would gain more publicity as the November elections approach.

In New York, cigarette sales have emerged as a hot-button issue in several ways.

John Catsimatidis, CEO of the Red Apple Group, parent of the Gristedes supermarket chain, said he continues to battle with the state legislature over the tax-free sale of cigarettes in the state by Indian reservations.

“Gov. [Eliot] Spitzer said he was going to address this on April 1, and I hope he didn't pick April 1 because it was April Fools' Day,” Catsimatidis said. “[Former Gov. George] Pataki had promised to do something about it, and he didn't.

“It really hurts supermarkets and convenience stores when you are competing with a non-tax entity,” he said.

Catsimatidis also confirmed that he's mulling over the idea of running for mayor of New York City in 2009, and that he has switched from the Democratic to the Republican party.

“I am seriously looking at it,” he said of a possible mayoral run.