CSA Regulatory Wrap-Up
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Regulatory Wrap-Up: Insider’s weekly guide to retail-related legislative developments

BY CSA Staff

Wages

Alaska: The Department of Labor and Workforce announced that it is rescinding a rule that allows employers a minimum wage exemption for persons with disabilities. The state joins others, notably Maryland and New Hampshire, that have recently eliminated the exemption.

Arizona: The house passed a resolution that would eliminate an anti-retaliation provision in the 2016 voter-approved minimum wage law. Current law states that if an employer takes disciplinary action against an employee within 90 days of a worker’s complaint, the action is presumed to be illegal retaliation. If the senate approves the measure, it would appear on the November ballot. This is separate from another legislative effort that seeks to cap the wage increases and eliminate the paid leave provisions of the same 2016 voter-approved law.

New Hampshire: A bill to raise the minimum wage to $15/hr by 2021 was defeated on a party-line vote in the senate.

North Dakota: Minimum wage advocates announced an initiative campaign to place a $15/hr minimum wage measure on the November ballot. Due to low population totals in the state, advocates only need around 13,000 signatures to qualify, increasing the likelihood of success.

Oklahoma: A bill that would allow municipalities to set minimum wages higher than the state level was defeated in a house subcommittee and is dead for the year.

Pennsylvania: Attorney General Shapiro plans to fight any Trump administration efforts to regulate tip pooling. Shapiro has led a group of 17 state attorney’s general who filed formal comments opposing the proposed regulations. The regulatory process has been stalled due to accusations that the Labor Department allegedly buried data that highlighted the negative consequences of tip pooling on restaurant workers.

West Virginia: A bill preempting local governments from enacting a variety of ordinances including those related to employee wages, benefits and scheduling passed the senate and moves to the house. A similar bill passed the senate last year but died in the house due to the chamber’s singular focus on a medical marijuana bill. Proponents are optimistic that without a similar distraction this cycle, the bill will be advanced to the governor for signature.

Wisconsin: A bill to prevent localities from enacting wage, benefit and scheduling laws, among other issues, passed the house. A companion bill in the senate has passed its first committee reading. The bill faces substantial challenges in the Republican-led senate but proponents believe they can earn the necessary votes to advance the measure.

St. Paul, MN: The city council held an informational meeting on the proposed $15/hr minimum wage. Council members indicated a desire to slow the legislative process in order to perform an economic analysis on the potential impact to local businesses. Mayor Carter campaigned on the issue and remains a vocal supporter of legislative action.

Wage Theft

Politico: An in-depth investigative report by Politico details challenges across the country related to the enforcement of wage laws. According to the report, workers lose $15 billion in wages each year to “shady bosses” because of lax enforcement and noncompliance. The report was published last week and the issue continues to receive nationwide attention.

Paid Leave

Nebraska: An effort to pass a statewide paid leave mandate died in committee and most likely will not advance this session.

CEO Pay

Honeywell: In what will likely be the first of many stories, Honeywell was one of the first publicly-traded companies to report its CEO to median employee pay ratio in accordance with SEC rules enacted under the Obama Administration. The Los Angeles Times reported the story highlighting Honeywell’s ratio and noted that more filings are coming and that the ratios are likely to be worse in the retail and restaurant sectors.

Labor Policy

NLRB: The board’s inspector general concluded that member William Emanuel should have recused himself from the recent Hy-Brand decision that overturned the 2015 Browning-Ferris joint employer standard. For now, it is unclear how this issue will be resolved. Most expect the ruling to stand and/or the pre-Browning-Ferris joint employer standard to be reestablished through other cases.

Transportation

Long Beach, CA: The city council voted unanimously in favor of city action to combat the long running port trucker classification and alleged wage theft controversies that have been highlighted over the past year. The council will now begin working with other local and state agencies to address the issue by supporting unspecified “current or future legislation that seeks to address the port trucker crisis.” While most labor advocates cheered the vote, some noted that the Los Angeles city attorney (who has jurisdiction over the jointly run port) has already filed suit against several trucking companies over alleged non-payment of wages.

Privacy

Oregon: A bill that mandates a 45-day notification period following a data breach passed the senate and now heads to the house. The law, and others like it across the country, are a response to recent high-profile data breaches, such as the Equifax 2016 breach of more than 140 million individual records.

South Dakota: Following senate approval earlier in session, a house committee unanimously passed the data breach notification bill supported by Attorney General Jackley that would make the state the 49th to have such a law in place. Several key provisions important to businesses have been incorporated into the bill, including the need to establish “reasonably determined harm” as the requirement for notification, along with a 60-day window to alert those who could be affected by a breach. The unanimous committee vote indicates the house will likely ultimately advance the bill to the governor’s desk for his expected signature.

Retail Crime

Kansas: A bill that raises the felony threshold level for theft of personal property from $1,000 to $1,500 passed the house and now moves to the senate. The bill represents a growing trend across the country as law enforcement and policymakers seek to reduce the cost of prosecution and imprisonment of what are perceived to be lower level criminal acts.

Key Takeaways

• Expect the Politico wage theft story to be referenced in state and local efforts around wage theft over the coming months. While labor advocates have made similar claims over the past few years, Politico is the first major publication to tackle the issue in-depth and its research will serve as data points for activists’ efforts.

• The first CEO pay disclosure went public this week. Many more companies will post in the coming months and the way the issue is covered and discussed will go a long way toward determining if this is a priority issue in cities and state capitals this year. Within the next few months, companies should have a sense of how many jurisdictions will follow Portland and enact surtaxes tied to the ratio.

Legislature Status for Week of 2/26/18
• The United States Senate is in session this week
• The United States House is in session this week
• Forty state legislatures are meeting actively this week:
o AL, AK, AR, AZ, CA, CO, DE, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, NE, NJ, NY, OH, OK, OR, RI, SC, SD, TN, UT, VA, VT, WA, WV, WY

Podcast

Check out our Working Lunch podcast each week that includes further analysis into these legislative issues, policy, politics and much more. You can find Working Lunch on the Nation’s Restaurant News website, or by clicking here, and when you download the podcast and subscribe on iTunes here.

 

The Regulatory Wrap-Up is presented by Align Public Strategies. Click here to learn how Align can provide your brand with the counsel and insight you need to navigate the policy and political issues impacting retail.

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On The Horizon: Travel Retail

Brick-and-mortar retailers struggling in traditional malls of yesteryear should look no further than the skies for inspiration. Don’t let the small footprint fool you … with a concentrated flow of foot traffic, airport retailers have an opportunity to create a memorable impact on a global audience, that they may never get online or in a traditional mall.

New airports, growing disposable income in emerging markets, and the expansion of low-cost carriers, are all merging to drive airport passenger volume to an all-time high. With these growing numbers, the airport retail market is expected to reach $125.1 billion by 2023, according to a new report published by Allied Market Research. With historic volume around the world, the focus needs to shift from making money from airlines, to making money from passengers, in terms of commercial revenue, through more engagement with unique retail, dining, hospitality, and leisure experiences. It’s time for a renewed focus on the travel experience. Retailers that focus on compelling environments, localized offerings, and utilize a forward-thinking approach to capture traveler attention, will be better positioned to expand their brand reach and secure consumer loyalty for a future where airports will become the new malls. Brands should focus on these key trends to leave a lasting impression to convert travelers to loyal customers:

Authentically Local
Fifty-six percent of global airport users wish to see culturally sensitive and authentic experiences, relevant to an airport’s location. Travel retailers have the opportunity to use this desire to their advantage and create unique experiences, offerings, and partnerships that create a sense of place and cultural appreciation, leaving visitors coming back for more. No longer just transactional in nature, travelers want to make a connection with an interactive, localized experience. The Vancouver Airport recently announced an expansion plan that includes an indoor forest that will replicate the natural habitat of the nearby Gulf Islands. Offering these unique, destination-specific experiences, from cooking classes to virtual reality tours, allow travelers to embed themselves in the culture without ever stepping foot outside the airport.

Photo by Roam Fitness

Creating an Ecosystem
Airports must evolve to become more self-sufficient environments. No longer stuck behind security checkpoints or confined to traditional indoor footprints, airports of the future must be more memorable and develop exciting destination attractions that travelers can actually look forward to visiting. Unlike struggling malls, airports have a constant source of potential shoppers, so the focus will become more about engagement. Just as we are seeing The Experience Economy affect traditional retail, travelers will also seek out more personally fulfilling experiences that enrich them intellectually, emotionally and spiritually. Creating cultural attractions in the form of gaming, farmers markets, museum exhibits, fashion shows, or film festivals – both pre-and-post-security, invites travelers and locals alike, to see the airport as a memorable and unique destination.

Wandering Wellness
For leisure and business travelers alike, there is a clear desire for the earliest possible removal of stress. Achieving this implies making the airport environment part of the overall experience, rather than a step in the process to the experience, and transforming the airport into an elevated and authentic destination in its own right. With 82% of global travelers requesting more spa options, airports should be expanding their service offerings to include wellness to better cater to stressed travelers. Brands like Roam Fitness allow on-the-go travelers to fit in a workout around their flight schedule. Indoor tracks, rooftop gardens, terminal step counts, and yoga rooms are all ways to embrace this healthy initiative.

Adaptive Environments
Today, smartphones are being carried by over 98% of airline passengers. This reliance provides proactive brands with a unique opportunity to utilize adaptive technology to create a more engaging and customized experience for travelers. Airports can create dynamic experiences through environments that adapt to the customer mood, flight schedule, location – and even weather. Brands using beacons could push sale notifications to those customers in the terminal that are experiencing flight delays. Virtual shopping walls could adjust merchandise dependent upon the surrounding traveler destinations. Brands need to be able to anticipate traveler’s needs, whether through data or environmental context, to create stronger brand loyalty, by proactively offering a service, solution, environment or product that is going to help with a passenger pain point.

Home Away from Home
Globally, the average time spent at an airport is 133 minutes, not including layovers and delays, so brands need to find better ways of replicating the comforts of home. Provide traveler’s space to call their own – to relax, dine, be entertained – or even sleep, giving consumers more control over their airport experience, to align with their traditional at-home lifestyle. Just as consumers are comfortable getting their food delivered by popular apps like UberEats or Grubhub, passengers at Baltimore-Washington International airport now have access to Airport Sherpa, an app that allows you to order meals to a designated spot in the airport, including your gate for a little pre-boarding snack. Airlines are starting to appeal to travelers personalized needs by offering services that bring home, to the airport: click-and-collect groceries, private dressing rooms, on-site clothing rentals, and family-friendly amenities, where travelers can recharge and make the most of their time away.

As a Senior Brand Experience Marketing Manager at FRCH Design Worldwide, Emily Hamilton bridges the gap between brand strategy and communication.

Looking at all experiences through a marketing lens, Hamilton’s background of web design, social media, and intellectual property strategy, lend itself to all things digital. Her fascination with retail trends propels her to uncover needs, desires, and opportunities in the industry to translate into actionable implications for brand experiences.

Hamilton has spoken at leading retail design conferences including GlobalShop and has had the privilege of collaborating with a wide range of brands, including American Girl, Hilton, Zales, Scripps Networks Interactive and Forest City. She is a graduate of Miami University, with a Bachelors of Arts in Social Psychology.

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Survey reveals No. 1 reason people shop at convenience stores

BY Marianne Wilson

If convenience stores want to compete and grow, they will need to increase their share of the food-service market, including adding healthier options.

That’s according to a survey by global consulting firm AlixPartners, which finds that food-service (prepared foods, hot/cold/frozen dispensed beverages, etc.) is the number one driver (27%) for consumer purchases at c-stores, followed by packaged beverages (17%) and cigarettes (13%).

Foodservice dining/purchases frequency has been on a strong growth trajectory, with a compound annual growth rate of 13.2% since 2012. But to maintain their growth, c-stores need to move beyond the 52.9% of people who purchase for snacks (42.6%) or late night (10.3%) and compete more for breakfast, lunch and dinner business, the report recommends. To do that, healthier options are necessary, with 45.6% of consumers saying “better for you” options are important to them.

And, a big challenge looms on the horizon for c-stores in the form of Amazon Go, Amazon’s new cashier-less c-store concept. More than 43% of survey respondents said if an Amazon Go opened nearby, they would shop at traditional c-stores less.

In other findings from AlixPartners; Convenience-Store Consumer Survey:

• Consumers’ most important factors in selecting a c-store to purchase a meal are location (21%), price (18%), and food quality (14%). Divided by age group, however, older consumers are most focused on location and convenience, while millennials and Gen X identified price and food quality as their top considerations.

• The most important technology offerings a c-store can have are mobile loyalty programs, self check-out and mobile coupons.

• Drive-thru windows, in-store dining area and delivery ranked among important innovations.

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