OPERATIONS

Washington Spotlight: Big Wins for Retailers

BY Joe Kefauver

As retail operators return to work this week after what was hopefully a busy Memorial Day weekend for them, they should be encouraged by some rare good news out of Washington, D.C. The industry had some big wins last week on very important issues. Republican House leaders wisely decided to remove language from the popular CHOICE Act that would have repealed the debit card swipe fee reforms the industry fought hard to pass in 2010.

Since the election in November and the subsequent announcement that Trump intended to seek repeal of the Dodd-Frank law, the banks and credit card companies began to salivate at the prospect of gutting it, including its hated caps on debit card fees they could charge retailers. The retail industry mobilized quickly and effectively. Republicans in Congress came to their senses knowing they faced a repeat of the bloody fight from seven years ago. Having little stomach for that battle and an unwillingness to face the wrath of Main Street retailers back home, leadership simply removed the language that would have repealed those caps. Finally, a win for the good guys.

If that wasn’t enough, after hearings in the US House last week, it appears that support has significantly eroded for the Border Adjustment Tax (BAT) that would put levies of up to 20% on thousands of imported consumer items. This was a tactic to raise revenues to offset other tax cuts during the corporate tax reform process. Even though this is the favored approach of Speaker Paul Ryan and other House leaders, many Republicans have backed off of their support and Treasury Secretary Mnuchin voiced the administration's opposition again this week. It is hard to see how the proposal, in its current form, could move forward, which is good news for retail operators.

All in all, last week was a pretty good one for the retail Industry and this newfound momentum will be important if the industry is going to protect its interests during the healthcare reform and tax reform battles to come.


Joe Kefauver is managing partner of Align Public Strategies, a full-service public affairs and creative firm that helps corporate brands, governments and nonprofits navigate the outside world and inform their internal decision-making.

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OPERATIONS

Fast-casual chain reveals culprit of recent data breach

BY Deena M. Amato-McCoy

Chipotle Mexican Grill is coming clean about a cyber-attack that targeted the chain last month.

An extensive investigation lead by leading cyber security firms, law enforcement and the payment card networks revealed that malware accessed payment card data used at point-of-sale (POS) devices at certain Chipotle and Pizzeria Locale restaurants between March 24 and April 18. Not all locations were involved, and the specific timeframes vary by location, according to the chain.

This is a more extensive description than the company’s initial report. Last month, Chipotle revealed that it detected “unauthorized activity” on its payment processing network, according to CNBC.

Specifically, the software searched for track data —which can include cardholder names, card numbers, expiration dates, and internal verification code — which is embedded in a payment card’s magnetic stripe. Hackers poached the information as it was routed through POS devices.

According to Chipotle, there is no indication that other customer information was affected. The chain declined to comment on how many payment cards have been affected.

During the investigation, Chipotle removed the malware and continues to work with cyber security firms to further improve its security measures. Besides continuing to support law enforcement’s investigation, the chain is also working with the payment card networks, a move that enables the banks that issue payment cards to heighten monitoring efforts.

Lists of affected Chipotle and Pizzeria Locale restaurant locations and specific timeframes are available at each brand’s website. In the mean-time, the company is urging “customers that used a payment card at an af-fected location to review their payment card statements for any unauthor-ized activity. All affected customers are urged to immediately report any unauthorized charges to their card issuer,” Chipotle said.

This is not the first public relations blow the Denver-based chain has faced. Chipotle, which operates more than 2,300 restaurants, continues to rebuild its reputation after a wave of food safety incidents in 2015 scared away customers, negatively impacting sales.

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OPERATIONS

Office supplies giant still weighing takeover offer

BY CSA STAFF

Staples Inc. has rejected a buyout offer.

The company turned down a takeover offer from Cerberus Capital Management, saying it was too low, Bloomberg reported. However, another private equity firm, Sycamore Partners, is still in the running to acquire Staples.

The bid from Cerberus valued the retailer at more than its current market value of about $5.8 billion, according to Bloomberg.

Click here to read more.

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