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               RETAILER                                             North Carolina Retail Merchants Association
                               February 15, 2006 · Volume 88

  In This Issue                Finding the Hidden Tax
Life Safety Code
Revealed —

            Page 2
                                           he old saying reminds us that     last line again.)
Number of                                  misery loves company. In that         How crazy is this system? Consider
Revoked Work                               case, when it comes to what’s     these two examples related to the prob-
Permits Rise —                             happening at your front end,      lems that followed deadly Hurricane
          Page 2               misery is just overjoyed.                     Katrina:
                                   In an effort to stay                                         First, we all watched
How Retailers                  competitive and offer                                         gas prices soar to almost
Can Keep the                   shoppers every choice                                         unimaginable levels after
Customer                       they could hope for,                                          the storm. As The Wash-
Satisfied —                    retailers large and                                           ington Post reported this
           Page 3              small have rushed                                             past fall, those price hikes
                               into the field of elec-                                       produced an incredible
NC Education
Lottery Update                 tronic payments by                                            windfall for the credit/
          Page 4               accepting credit and                                          debit card companies. Be-
                               debit cards. And                                              cause they get a percent-
Joint Study                    shoppers have                                                 age of sales at the pump,
Committee                      jumped on board for a                                         the card companies simply
Announced —                    host of reasons—                                              watched their share and
           Page 7              from the ability to                                           dollars rise.
                               collect card-member                                              The second is even
                               points to simple is-                                          worse. In hurricane-
                               sues of handling their                                        ravaged areas where elec-
                               payments.                                                     tronic clearing of cards
                                   In many stores, plastic (credit and       was impossible due to storm-related
                               debit) now easily outweighs paper (cash       problems, retailers had to revert to the
                               and checks.) The only problem is there        old manual “knuckle-buster” machines.
                               is a major catch.                             Although they had no choice, it meant
                                   Plastic transactions are handled elec-    these retailers were using a system the
                               tronically, allowing cards issued by mul-     card companies discourage. So these re-
                               tiple banks to be quickly accepted and        tailers were paying the highest inter-
                               charged at the front end. The mechanics       change fees nearly 3 times the profit
  Fran E. Preston, President
                               of this system create something called an     margin of an average supermarket in
  Christie Burris, Editor      interchange fee and here’s where the          time of a disaster.
                               happy story ends.                                 Card companies will remind you that
                                   Today, it’s highly likely that the fees   you don’t have to take their cards, but
                               you pay to handle a card payment are          given the competitive nature of our in-
                               larger than the profit you make on that       dustry and the need to offer the shopper
                               same order. (Think about how hard you         every reason to come to your store, the
                               work to make that sale and then read that                             Continued on page 2
Finding the Hidden Tax                         “It won’t surprise you that
                                             shoppers, who know all too well
Continued from page 1
                                                about fees from their card                    Life Safety Code
 option of eliminating cards probably         companies, can be extremely
                                               sympathetic on this topic.”

 doesn’t work. (Let’s not forget that it
 is the same card companies who keep                                                                 he N.C. Department of La-
 filling up our mailboxes with offers to    would easily be recouped with even                       bor’s proposed repeal of the
 take out one more card.) The issue is      the smallest improvement in                              Life Safety Code was ap-
 so bad that even the largest chains see    interchange.                                             proved recently by the
 the uncontrollable fees related to all         But don’t stop there. We need to         Rules Review Commission with an
 aspects of credit and debit cards as one   hear your stories on problems you            effective date of December 1, 2005.
 of the most important issues they face.    have encountered with fees and how           Employers now must follow general
      On this issue, size doesn’t matter;   these fees are impacting your bottom         industry standard 29 CFR 1910, Sub-
 everyone is losing. And the simple         line. These stories and the facts we         part E, Exit Routes, Emergency Ac-
 truth is that these fees are being paid    find can only help us illuminate the         tion Plans and Fire Prevention Plans
 somehow—almost a hidden tax on all         challenges facing all of retail. And         on fire protection hazards. The depart-
 shoppers whether or not they use a         don’t stop with telling us. This is a        ment proposed the repeal after a study
 card.                                      topic to raise with your local legisla-      of citations issued under the Life
      It raises the question of what can    tors or even your local newspaper.           Safety Code from 2001 to 2004
 be done to fight back and luckily there    Hidden taxes need be exposed to light.       showed that more than 90 percent of
 are some answers. The Food Market-         (For more information on FMI’s ef-           the citations could have been issued
 ing Institute (FMI) has formed a coali-    forts, contact Jennifer Hatcher at           under the general industry standard.
 tion of retailers—both in and out of                               The repeal streamlines enforcement
 the food industry—to shine light on            After all, this is one time that even    of the life safety standards and reduces
 the issue and make lawmakers aware         Wal-Mart is too small to enact change.       confusion for employers. For addi-
 of just how crazy the card fees have       Yet even a single store operator can be      tional information regarding 29 CFR
 become. It won’t surprise you that         part of the improvement. Join us.            1910 Subpart E, contact the Depart-
 shoppers, who know all too well about                                                   ment of Labor’s Education, Training
 fees from their card companies, can be     Source: Written by Michael Sansolo, Food
                                                                                         and Technical Assistance Bureau at 1-
 extremely sympathetic on this topic.       Marketing Institute (FMI).
                                                                                         800-NC-LABOR (1-800-625-2267).
      However, winning this battle won’t
 be easy. If you want to become part of                                                  Source: NC Labor Ledger. Written by John
 FMI’s effort to address this topic, con-                                                Hoomani, General Counsel
 tact us for information on joining our
 coalition. The cost is low per store and

                                                      Number of Revoked Work Permits Rise

                                                        he N.C. Department of Labor revoked 296 work permits for violations of
                                                        youth employment laws in 2005, an increase from 209 in 2004. The ma-
                                                        jority of the violations came in the restaurant industry, where 14- and 15-
                                                        year-olds are prohibited from working in establishments with alcohol
                                            permits. Several violations also were found in the construction industry, where law
                                            prohibits the hiring of 14- and 15-year-olds.
                                                “The majority of youth employment certificates are revoked for 14- and 15-year
                                            olds,” said Henry Sasser, wage and hour deputy administrator. “The laws are
                                            stricter for this age group.”
                                                Teens who are 14 or 15 are not allowed to work in manufacturing, mining or
                                            jobs considered hazardous, detrimental or prohibited under the Wage and Hour
                                            Act. The time of day and number of hours worked also are limited for this age
                                            group. All youth employment certificates are reviewed and approved by the Wage
                                            and Hour Bureau. To view a complete list of hazardous, detrimental and prohibited
                                            occupations and youth employment laws, visit the NCDOL Web site at

How Retailers Can Keep the Customer Satisfied

F          or retailers, 2006 will be
           a mixed year. Long-term
           technology investments,
           such as radio frequency
identification (RFID), multi-
channel retailing and digital sign-
                                                                                            ware, applications and network-
                                                                                            ing technologies are lowering
                                                                                            investment barriers, success will
                                                                                            be constrained by a lack of focus
                                                                                            on content management systems.
                                                                                                Many of the digital signage
age, will finally make break-                                                               installations are advertising-
throughs.                                                                                   driven business models that fea-
    At the same time, strategic                                                             ture TV advertising repurposed
trends – such as putting the cus-                                                           to fit store displays, rather than
tomer at the center of new IT in-                                                           content designed for the shop
vestments, and entry into overseas                                                          environment.
markets – will begin to emerge.                                                                 Retailers should prioritize
    Gartner analysts predict retailers                                                content management systems ahead of
using RFID to improve on-shelf avail-      as separate entities.                      digital signage projects, as this can
ability will begin to outperform rivals        Gartner recently asked consumers       help them focus on broader marketing
in customer satisfaction by the end of     how they would react to negative           initiatives. Customer-centric strategies
this year.                                 shopping experiences. Consumers            will be announced in the coming
    The number one issue for the shop-     generally indicated that service           months, but not implemented effec-
per is out-of-stock merchandise – an       breaches in one channel would change       tively by 75 percent of all retailers,
inconvenience that causes 47 percent       their shopping behavior in others. The     despite significant investments to col-
of customers to shop elsewhere as a        shopping experience will be better         lect and retain customer information.
result. New RFID implementations           with retailers who make channel inte-          And the two biggest areas of the
must be linked to workforce manage-        gration an internal issue and invisible    business – store operations and mer-
ment technologies to ensure that re-       to customers. And the store of the fu-     chandising – remain product-focused.
plenishment tasks are allocated and        ture will be multi-channel, having cus-    Today’s retail software technology is
completed. The level of interest in        tomer access to brick-and-mortar,          not capable of providing retailers with
RFID will grow steadily from 2006          internet and others.                       the most customer-centric capabilities.
through 2009.                                  Retailers will need to either change       Retailers need to take action on
    As many as 56 percent of retailers     their organizational structure or adapt    customer data, allowing them to main-
say they will be using item-level          business processes to eliminate issues     tain one-to-one relationships. Such
RFID, and 69 percent will be using         created by cross-channel conflicts,        action will require most of today’s off-
pallet and case-level RFID. But mar-       such as separate buying and marketing      the-shelf retail systems to evolve fur-
ket leaders are unlikely to share the      structures, which can create inefficien-   ther. Merchandise planning software,
findings from their RFID pilots. Fol-      cies and inconsistency.                    for example, will evolve to include
lowers, therefore, should make plans           Gartner also predicts that, through    customer data.
for RFID now. Assess your replenish-       2006, a lack of focus on content man-          Retailers are showing how cus-
ment processes, and take action to         agement systems will keep retailers        tomer data can be used beyond mar-
counter any advantage the market           from capitalizing on technologies such     keting-led direct promotions to deliver
leaders will gain by using RFID to         as digital signage to enhance customer     a better store experience and to plan
improve stock availability. But be         service.                                   better merchandising.
ready to make short-term store replen-         A large percentage of consumers
ishment process improvements.              say digital signage has no effect on       Source: Computing Magazine; Written by John
    Gartner also predicts that a handful                                              Davison, managing vice president and re-
                                           their shopping. But major retailers        search director in Gartner Industry Advisory
of retailers will finally achieve seam-    continue to invest in digital signage      Services, Retail.
less multi-channel retailing this year,    networks, particularly in the grocery
allowing them to outperform competi-       sector.
tors that view channels as separate            Up to 28 percent of companies are
entities.                                  deploying, or will deploy, such sign-
    Customers are looking for pricing      age by the end of the year, and another
and promotion transparency across          33 percent expect to do so after 2006.
channels. But most retailers still run     But while shrinking costs for hard-
their catalogue, e-commerce, and store
 NC Education Lottery Update

 O              n February 15 a Wake        Judge Hight allowed the case to move
                County Superior Court       forward.
                Judge allowed a lawsuit         We are aware that many of our
                intended to halt the im-    members are putting real money into                  Are your profits
 plementation of the North Carolina
 education Lottery to move forward.
                                            the creation of infrastructure to adapt
                                            their stores for selling lottery tickets,
                                                                                                going up in smoke?
 The next hearing on the case will be       and that you would like to know
 March 20, 2006, just ten days before       whether or not those who are bringing
 the first tickets are to be sold. Due to   the lawsuit will prevail. At the time of
 the constitutional issues surrounding      this printing, NCRMA did not have a
 the case, the state had a high hurdle to   definitive answer, but we will keep
 climb to get the lawsuit tossed out, so    you updated as this issue proceeds
 it was not necessarily surprising that     forward.
                                                                                                CompCarolina workers’
                                                                                              compensation is designed just
                                                                                                     for retailers!
Lottery Terminal Installation and Training                                                   * Loss Control Services
Information for Retailers                                                                    * Aggressive Claim Services

                                                                                             * Easy Claim Reporting
            elow is information that was        GTECH (lottery terminal, printer,            * Premiums Based on Payroll
            recently released by the            satellite dish and cabling) will be          * Friendly Customer Service
            North Carolina Educational          installed by GTECH beginning the
            Lottery. It details Terminal        week of February 13th and con-
Installation and Training Information           tinue through March 30th. In-
for your stores. Following this informa-        stallers will require access to the
tion is a website address to a diagram of       roof for satellite dish installation.
how the terminal should be installed in     •   Retailer locations will receive
your store. Finally, if you have not al-        telephone notification prior to the
ready done, so please visit the website         installation team’s arrival.                  If you have additional questions, call
to access information on how to com-        •   A dedicated Quad Box (25 amp              the North Carolina Educational Lottery
plete the fingerprint card.                     minimum circuit) must be in-              at 919-71-LOTTO (715-6886).
                                                stalled by the retailer at the re-
Terminal Installation and Training              tailer’s cost, prior to installation of   DIAGRAM OF LOTTERY
Information for Retailers                       the equipment.                            TERMINAL WEBSITE ADDRESS:
Application Approval:                       Retailer Training:                            Electrical_and_Counter_space_NC-
• Once your application has passed          • Notification of training, via post-
   credit, Department of Revenue and            card, will be sent to each individ-
   criminal background (through Alco-                                                     FINGERPRINT CARD
                                                ual location.                             INSTRUCTIONS WEBSITE
   hol Law Enforcement – A.L.E.)
                                            • Training classes will begin in              ADDRESS:
   checks, you will receive a letter ac-
   knowledging your location’s ap-
   proval.                                  • Training classes will be scheduled          fingerprint_instructions.pdf
                                                geographically across the state.
• You may be contacted by GTECH
   to install the terminal prior to re-     • Only approved retailers will be
   ceiving the approval letter.                 scheduled for training.
                                            • Each retailer location must attend
Equipment Installation:                         training to be eligible to receive
• Equipment that will be provided by            and sell NCEL tickets.

                                                Retail SnapShots
                                                Retail Sales Jump in January -- The U.S. Census
                                                Bureau said that advance estimates of U.S. retail and
                                                food services sales for January, adjusted for seasonal
    The Check                                   variation and holiday and trading-day differences, but
                                                not for price changes, were $365.4 billion, an increase
     Experts                                    of 2.3 percent from the previous month, and up 8.8
                                                percent from January 2005.

 Technological advances in the last decade      Gift Card Redemption and Clearance Sales
   have helped business owners increase         Give Retailers Strong January-- The holiday sea-
productivity and improve customer service.
  With more than 35 years of experience,
                                                son extended into January for many retailers, as con-
    TeleCheck combines the power and            sumers flooded the stores with gift cards in-hand
convenience of electronic check commerce        ready to take advantage of clearance sales. According
with the unsurpassed reliability and security   to the National Retail Federation (NRF), retail industry sales for January (which ex-
   of the industry’s most comprehensive
information and risk management systems.
                                                clude automobiles, gas stations, and restaurants) increased a solid 7.6 percent over last
                                                year and rose 2 percent seasonally adjusted over December.
Simply stated, TeleCheck will help
   you accept the most possible                 Consumer Confidence Hits 16-month High -Fueled in part by better job and
  checks from the most possible                 wage prospects, consumer confidence hit 96.1 in early February, marking its highest
     customers with the least                   point since October 2004, according to the RBC CASH Index. The increased confi-
          possible risk.                        dence is expected to boost spending, which economists predict will lead to first-
                                                quarter economic growth of 4%. Star Tribune/Associated Press
        Call NCRMA today!
                                                Online Retail Spending Will Reach $144 Billion In 2010 - JupiterResearch
           800-662-7211                         forecasts that U.S. online retail spending will increase from $81 billion in 2005 to $95
                                                billion in 2006, and will grow to $144 billion in 2010. Retail Bulletin

                                                U.S. Shoe Sales Ran Circles Around Apparel In 2005 -- Rising demand for jew-
                                                eled shoes, wedge heels and boots of all stripes fueled 2005 U.S. sales growth of foot-
                                                wear that nearly tripled apparel, said a market research company. Reuters

                                                Tesco’s Coming to America: Why U.S. Retailers Should Be Shaking In
2006 Safety Schools                             Their Boots -- Tesco, the UK’s largest grocery retailer and the fifth largest retailer in
                                                the world with total revenue approaching $60 billion, is planning its entrance into the
                                                U.S. retail market in 2007. AMR Research
             March 8-10
 Central Carolina Safety School, Raleigh        More U.S. Multi-Channel Retailers Eyeing Canadian Market -- Armed with
Contact Jay Sprankle at (919) 992-7255          data on the Canadian sources of online sales, more U.S. retailers are planning to open
                         stores north of the border, says Patrick Bartlett, president of Canada Post Borderfree.
                                                Internet Retailer
            March 23-24
Eastern Carolina Safety and Health School       What the Wine Industry Doesn't Know About Women - Women account for
              Atlantic Beach                    nearly 64% of wine consumers, but wine marketers are not yet doing enough to sell
                         women on the virtues of wine, according to marketing expert Marti Barletta. Women,
                                                she writes, are more likely to be sold with a marketing strategy that focuses on the
               April 6-7                        social experience of enjoying wine with friends or a special someone, rather than fo-
   Charlotte Safety and Health School           cusing on ratings and other cold data. Advertising Age
Contact Laura Manns at (704) 342-6163                Kellogg Turns a New Leaf at 100 Years Old -- Kellogg Co., which celebrates its
                                                100th anniversary this week and brought in more than $10 billion in sales last year, is
               April 13                         tinkering with its formulas to make its products more nutritious. It plans this year to
        Hickory Safety School                   replace partially hydrogenated oil and saturated fats with soybean oil in some of its
       Contact John Saunders at                 products. Chicago Sun-Times/Associated Press
           (704) 342-6163

        Order your copy of The Retailer’s Handbook today!

                                                    LAWS YOU SHOULD KNOW!
    Updated to Reflect all Changes to Legislation Through 2006

    Although no retail store owner or manager can be expected to know every aspect of retail and personnel law, he can and
    should be expected to know where to find the answers. That is why the North Carolina Retail Merchants Association created
    The Retailer’s Handbook. Now updated to include laws passed in the 2005 Session of the General Assembly, this manual is
    a must-have for all retailers.

    The first part of the manual, Laws Relevant to Retailing, describes North Carolina laws and crimes that impact retailers. The laws
    are grouped by subject area. Within each subject area:
    • the elements of the crime are set out
    • the punishment for the crime is stated
    • background information relevant to the crime is discussed, and
                                       • any civil actions available to recover losses from the crime are explained.

                                               With the 2006 updates you will find changes to North Carolina law effective through 2006 that af-
                                               fect the way you do business including: 1) sweeping new identity theft laws; 2) Changes to legisla-
                                               tion regarding alcohol permits and wine tasting permits; 3) methamphetamines; 4) definition of
                                               indecent exposure; and 5) legislation regarding the payment of employees.
                                               This section is written not in legal language, but for real people to read and understand.

                                               Following the layman’s explanation of North Carolina laws is a section of frequently asked ques-
                                               tions of NCRMA staff and information from the Departments of Labor and Revenue. We’ve also
                                               provided you with sample signs and posters (these are now available in Spanish as well) that you
                                               use daily in the workplace. These can all be ordered from NCRMA.

                                      In The Retailer’s Handbook, you will discover the legal acuity of an attorney whose expertise is
                                      retail law -- plus the input, know-how, and insights of NCRMA’s three full-time lobbyists who carry
                                      a combined history of over 35 years of working for the legislative advancement of retail issues in
    North Carolina. The Retailer’s Handbook is designed to grow and change as laws and procedures of our retail industry also grow
    and change, with updates provided on an as-needed basis.

                                          The Retailer’s Handbook is $25 for members and $50 for non-members.

    Name: ________________________________________________________________________________
    Company: _____________________________________________________________________________
    Address: ______________________________________________________________________________
    Phone: _______________________________________________________________________________
                                                           Payment Information:    Check Enclosed
                                                      Bill Me:     Amex         MasterCard       Visa

                                        Card Number: _______________________________ Exp. Date: _______

     NCRMA Contact Info: 601 St. Mary’s Street, Raleigh, NC 27605   Phone: (919) 832-0811   Toll-free: (800) 662-7211   Fax: (919) 832-0812

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             re sales at a plateau or even    service! Their expanded line of insurance options is               the way!
             declining? Does the stress       underwritten by the industry’s leaders:
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rigorous exercise on a regular basis.
    A recent research project reported                                 Call now! 800 662.7211
in the Journal of Small Business Man-
agement examined the following
    “Are entrepreneurs who maintain a
fitness regimen of rigorous exercise
more effective in goal attainment as
expressed by intrinsic and extrinsic
    The short answer is yes. The re-         Joint Study Committee Announced on NC’s
searchers investigated 366 small busi-
ness owners to determine if the trade
                                             Ability to Respond to Disaster

off between exercise and time devoted
to managing their companies was                           Joint House and Senate        terrorism, and any other topic the
worth it. Entrepreneurs who regularly                    Study Committee was an-        committee believes is related to its
engaged in rigorous exercise were bet-                   nounced the first week of      purpose.
ter at attaining personal satisfaction,                  February that could have a        NCRMA staff has been reviewing
independence, and autonomy. Their            significant impact on grocery, drug        legislation that has been passed in
companies also showed significant            and home im-                                                  Florida and is under
improvement in sales over companies          provement store                                               consideration in
which were managed by non-                   operations. Re-                                               Georgia that deals
exercisers!                                  sponding to con-                                              with opening retail
    What are the benefits of exercise?       cerns arising after                                           stores after a disas-
There’s a direct relationship between        Hurricanes Floyd,                                             ter, and the ability to
fitness and mental performance. Peo-         Ivan and Katrina,                                             transport critical
ple who are physically fit:                  Senate and House                                              products in the im-
                                             leaders appointed                                             mediate aftermath of
• Process data faster                        a committee to                                                a storm. We believe
• Experience a slower decline in             look at North                                                 that the work of this
     information processing as they age      Carolina’s ability to respond to dis-      committee shines a spot light on work
• Are less likely to be obese                aster.                                     that we were already planning to un-
• Possess higher levels of energy               The 36-member Joint Interim             dertake on your behalf.
• Enjoy enhanced feelings of well            Study Committee on Emergency Pre-             The committee is to report back to
     being                                   paredness and Disaster Manage-             the House and Senate with findings
• Enjoy reduced anxiety, depres-             ment and Recovery is charged with          and recommendations by the end of
     sion, tension, and stress               investigating issues as diverse as com-    the 2006 calendar year; it may issue
                                             mercial building codes, evacuation         an interim report to the short ses-
• Live longer.                               plans, response measures for indus-        sion in May. We will keep you
Source: Family Times newsletter
                                             try, preparedness for hurricanes,          posted on the progress of this
                                             pandemic flu preparation, emer-            committee.
                                             gency flu vaccinations and bio-

   Our mission is to create and re-create an industry marketplace in which North Carolina retailers can thrive, by:
                                 Effective legislative and regulatory actions
                                 Targeted member services, and
                                 Hi-tech distribution of information

   We achieve this by our constant focus on fiscal responsibility and our core values of integrity, trust and professional excellence.

                                            The Conference Group has lowered their calling
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    If you haven’t already used this incredibly user-friendly conference calling program,
             we urge you to give it a try. These are just some of the reasons why:

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Call Kristin at NCRMA today to find out how you can schedule your next conference!
               Telephone: 919-832-0811; E-mail:

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