The OCSA has reached out to the LCBO to discuss the partnership with the 400-family run LCO stores located in mainly rural Ontario locations responsibly selling a limited supply of alcoholic products to customers in these communities.
We recommend that all Convenience Outlet owners contact their new elected local MPP’s to ask them for assistance in bring this issue to the attention of the Minister of Finance and the Premier.
It is interesting that a government agency has little interests in the well being of the small business model or the recommendations to make the LCO businesses a better and stronger offering throughout Ontario.
Issues facing the 400 Convenience Outlets:
- Limited supply of products to satisfy customer needs
- Lack of increased margins to offset growing costs of small businesses
- No promotions in LCO sites where rural customers can have the same offers as urban stores
- Increased costs of shipments and insurance rates
- Increased costs of credit card and debit card transactions
- The ability to sell on all holidays
- The ability to have all staff sell stocked alcohol and handle restocking of shelves (if they can prove age testing)
- The ability to advertise and promote our stores & products
- The ability to put up signs in our stores and minimize price changes
Additional Areas of Concern:
- Out of stocks issues for the Agency model (example; twisted tea out for three weeks straight in C stores while available in LCBO stores)
- Delivery costs – Stores have no say in delivery costs that consume as much as 25% of margins. We only make 9.8% gross margin and must absorb all costs including delivery costs. No supplier to the convenience store channel places delivery costs on stores except the LCBO. You may recall The Beer stores in July 2021 imposed a $250 weekly delivery costs to all outlets and your Ministry has asked them to put this on hold (for now).
- Discounts and the operators absorbing the weekly discounted costs. All-in store shelf discounts must be absorbed by the agency retailers and in many cases, we experience losses.
- Price changes – there are too many changes too frequently and the need to continually change the scan data in operators back rooms. Recent price changes have come in a PDF file instead of an excel sheet, making for a manual insert of all changes. Previously all price changes were in an excel sheet.
- LCBO continues to offer ‘free’ products that all local C stores sell as promotional items even though we have asked for this to stop. Interesting (as well) that the agency stores don’t get to participate in giving away free bags of chips or bottles of free pop with alcohol products, only the large LCBO stores.
- Improving the RFP process so that there are more frequent opportunities than twice-a-year, and a better communication process to independent stores.
- There are many rural stores that could participate in additional outlets, but LCBO is very restrictive in when, how and why some sites are not considered or approved.