EXPRESS INEL

2016 | Issue 7

Counting Seasonal Workers Under Pay or PlayWritten by Todd Minchew, SIA Group

Seasonal Workers May Affect Large Employer StatusEmployers that hire seasonal workers are reminded that there is an exception when measuring workforce size to determine whether they are an applicable large employer (ALE) subject to the Affordable Care Act’s employer shared responsibility (“pay or play”) and corresponding information reporting provisions.

Seasonal Worker Exception

If an employer’s workforce exceeds 50 full-time employees (including full-time equivalent employees) for 120 days or less (or 4 calendar months) during the preceding calendar year, and the employees in excess of 50 who were employed during that period were seasonal workers, the employer is not considered an ALE for the current calendar year. A seasonal worker for this purpose is an employee who performs labor or services on a seasonal basis (e.g., retail workers employed exclusively during holiday seasons are seasonal workers).

Seasonal Worker Versus Seasonal Employee

While the terms ‘seasonal worker’ and ‘seasonal employee’ are both used in the pay or play provisions, only the term ‘seasonal worker’ is relevant for determining whether an employer is considered an ALE. For this purpose, employers may apply a reasonable, good faith interpretation of the term ‘seasonal worker.’ For more information on the difference between a seasonal worker and a seasonal employee under pay or play, please refer to IRS Pay or Play Q&A #54. ☐

Council News

Drive Growth with Loyalty

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WIC Updates

Service Animals in Grocery Stores

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Happy Holidays from CFIC Staff

Council News Council NewsMessage from the Executive Director Lindsey Kueffner

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CFIC Members,

We know that the holiday season is particularly intense in the grocery industry and we hope that your Thanksgiving holiday was not only successful and profitable but—more importantly—that you were able to carve out some time to spend with friends

and family.

As 2016 draws to a close, we at CFIC are reflecting on an eventful year that was 2016 and a great year that is to come in 2017!

In 2016, CFIC members in South Carolina saw the introduction of emergency management reentry passes as the result of our legislative efforts and retailers got to put them to use during Hurricane Matthew. And through CFIC’s efforts with the South Carolina Retail Association, grocers in ten cities and counties can now sell beer and wine on Sundays. Also this year, CFIC’s North Carolina legislative team fixed a problem from the 2015 legislative session that created tremendous inequity (in addition to a lot of confusion) regarding sales taxes on repairs, installation, and maintenance services. While on the surface this doesn’t seem like a big deal to the grocery industry, the impact placed an additional burden on any retailer looking to upgrade equipment or fixtures, remodel a store, install new software systems, or simply maintain their existing equipment. The North Carolina legislative team also halted costly mandated alcohol training and passage of an exam for every grocery employee in order to sell alcohol.

Both state legislatures convene in January for the start of the two-year session. With many new faces in both state houses—and potentially a new governor in North Carolina—much of the early part of session will be focused on educating legislators about the impact of the retail grocery industry. In 2017, CFIC will continue to fight onerous local plastic bag bans in South Carolina and continue to broaden opportunities for beer and wine sales in grocery stores, in addition to proposing legislation to ban local governments from creating local employee benefit policies and increasing the state’s felony threshold. CFIC’s North Carolina lobbying team is tasked with advocating for the retail grocery industry to ensure that onerous burdens aren’t placed on our retailers to fund the needs of the state’s growing number of citizens, as North Carolina is now the 9th most populated state in the country. Of course we will keep our members attuned to the plethora of federal issues as well, as there are bound to be plenty of changes with a new administration come January. Our January and February issue of the ExpressLine will cover more of the legislative issues in both states.

In the meantime, we at CFIC sincerely give thanks to you—our members—for your continued support of this organization.

We wish you a joyous, healthy, and profitable holiday season and a very happy New Year!

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CFIC FEATURED MEMBERS

Featured CFIC members pay annual membership dues of $1,000. For more information on membership and sponsorship opportunities, contact CFIC Assistant Director Brenna Favara at (919) 832-0811 or brennaf@cficweb.org

2017 Convention Sponsorship Commitments Requested The annual CFIC Convention is a members-only event. While company membership alone is enough to provide you access to the convention, sponsorship provides additional valuable opportunities. Complimentary registrations, membership directory opportunities, eligibility to donate product and private one-on-one meetings with retailers are just a few of the perks that convention sponsors receive.

With sponsorship levels ranging from $1,000-$11,000+, you are sure to find a level to accommodate both your budget and your needs. To learn what each sponsorship level entails, contact Brenna Favara at (919) 832-0811.

Although sponsorship payment can be accepted in 2016, it is not due until January 1, 2017, CFIC staff is requesting your commitment as soon as possible in order to plan accordingly for the 2017 Convention. Simply, e-mail your planned monetary commitment to Brenna Favara at brennaf@cficweb.org.

If you require special payment arrangements to accommodate your fiscal year please contact Brenna.

SAVE THE DATE!CFIC 13th Annual Convention

Sunday, July 23–Wednesday, July 26, 2017

Retailers Must Not Only Retain Current Customers, But Also Move Them Up the Loyalty Ladder To Drive Growth

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Consumers’ grocery shopping patterns are quickly evolving as just-in-time shopping is becoming the norm. Since there are more

places to shop, and more products to choose from than ever before, IRI® is taking a closer look at how retailers can find true organic growth by maximizing the value of their current shoppers in today’s fragmented marketplace in its Times & Trends Report, “The Omnichannel Journey: Translating Big Data into a Prescription for Growth.” Quick trips—those “I need it now” grocery excursions—account for two-thirds of shopping visits and one-third of grocery expenditures. And these trips are not made at one store or even one channel. In fact, there is a major shift in how consumers are approaching grocery shopping, because they are spreading their money across more channels and formats as they shop to fulfill their needs. “Retailers are grappling to not only understand consumers’ varied shopping patterns, but also capture shares of their increasingly fragmented shopping trips,” said Susan Viamari, vice president of Thought Leadership for IRI. “Retailers really need a clear 360-degree view of shopper spending to grow. This perspective will help them know what their key and target shoppers are looking for, so they can engage the shopper where, when and how it matters most to them. Those retailers that can personalize the shopping experience move their customers up the loyalty ladder, increasing the lifetime value of those customers and supporting growth along the way.”

Four Steps to Success

Industry experts estimate that it costs anywhere from five to 25 times more to acquire a new customer than it does to retain an old one. With this in mind, IRI encourages retailers to follow four steps to maximize the value of each and every one of those customers and capture share:

1) reward current customers, 2) grow current customers, 3) activate new shoppers, and 4) reactivate customers that have lapsed.

Since attracting new customers is expensive, the key to success for retailers is to get the most out of their current customers, rather than just focusing on attracting new customers, to minimize costs. Maximizing customer loyalty begins with understanding high-value customers and assessing their level of loyalty. And to move customers up the loyalty ladder and even acquire new customers, retailers need to shift from the standard category management perspective to a customer management perspective. Loyalty programs are flush with information about members—from category and brand preferences to price and promotion sensitivity. This information is essential to developing programs that target and resonate with a retailer’s best customers.

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Personalization Begins with Knowing the Shopper

Personalization will be the crux of future retail success. This does not mean retailers should abandon mass-marketing programs. Rather, the future will be about supplementing mass efforts with targeted programs aimed at deepening a customer’s relationship with a retailer. Getting this right means that retailers need to know their customers inside-out, so they have the right marketing programs, the right products and assortments with the right prices, and marketing messages aimed at positively influencing customer loyalty and driving activation. Targeting these high-value and potential customers is not easy. Traditional scanner and demographic data and frequent shopper program data provide some visibility into important shopper attitudes and behaviors. However, this does not provide the all-important 360-degree view of shopping and spending habits, or visibility into rest of market and national coverage. “The path to purchase has become a maze of twists and turns, with thousands of points of interaction along the way,” added Viamari. “Retailers need to harness the vast sea of big data around shopper attitudes and behaviors and bring it together in integrated and real-time fashion. Only then will they understand what is moving the needle today, and predict and prepare for what tomorrow will bring, so that they can consistently serve their customers in a highly personalized and engaging fashion.” ☐

About IRIIRI is a leading provider of big data, predictive analytics and forward-looking insights that help CPG, OTC healthcare organizations, retailers and media companies grow their businesses. Find more information at www.iriworldwide.com.

Sales Tax Changes

NC Department of Revenue Issues Directives on New Sales Tax Changes

In late 2015, the North Carolina General Assembly’s 2015-2016 budget included a provision that was the complex expansion on sales tax of repairs, mainte-nance, and installation. The intent behind expanding sales tax to include these services was a step toward the long-term goal of broadening the tax base in order to lower the corporate and personal income tax rate. Rather than adding new taxpayers, legislators chose to continue to tax existing taxpayers. What law-makers perhaps did not anticipate, however, was the immense confusion and complications the new law would trigger.

As anticipated, the NC Department of Revenue (NC-DOR) recently began issuing directives on these new sales tax changes which become effective January 1, 2017. CFIC expects the NC DOR to release additional reference documents before year’s end. Below is the complete list of directives issued by the NCDOR to this point.

Issued Directives as of 11/17/2016:

Real Property Contracts:http://www.dornc.com/practitioner/sales/directives/SD-16-3.pdf

Repair, Maintenance and Installation Services:http://www.dornc.com/practitioner/sales/directives/SD-16-4.pdf

Vehicle Repairhttp://www.dornc.com/taxes/sales/impnotice111516_vehiclerepair.pdf

Vehicle Service Contracts http://www.dornc.com/taxes/sales/impnotice111516_vehicleservicecontracts.pdf

Service Contracts http://www.dornc.com/taxes/sales/impnotice111516_servicecontracts.pdf

As we continue to review and analyze the documents, additional information will be sent to you regarding the directives’ implications.

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CFIC ExprEssLinE

WIC Updates in the Carolinas

North CarolinaThe North Carolina WIC Retailer Advisory Council met via conference call on November 8th and NC WIC introduced Solutran as the state’s eWIC service provider. Solutran has extensive experience in accepting WIC and is the service provider for Maryland and Montana’s eWIC programs. As the state continues to make progress toward implementation of eWIC, NC WIC reported that 95% of vendors have completed the Vendor Readiness Survey and that their field teams are still collecting UPC/PLU data from stores. NC WIC is still on track to roll out eWIC in the first half of calendar year 2018. As has been mentioned on previous calls, eWIC will be rolled out by region from East to West. In preparation for eWIC, NC WIC recommends that retailers reach out to their payment processors to determine if they accept eWIC in other states to begin working through the transition in North Carolina. NC WIC will be providing a “Frequently Asked Questions” document in the coming weeks, so please stay tuned. In the meantime, we hope that our retailers will plan to join the WIC Retailer Advisory Council calls in 2017. We have quarterly calls scheduled, however we will be adding monthly calls as the state closes in on its timeline for eWIC rollout, so stay tuned.

The quarterly calls are as scheduled below:

Tuesday, February 14 at 10:00 amTuesday, May 9 at 10:00 amTuesday, August 8 at 10:00 amTuesday, November 14 at 10:00 am

NC WIC has set up an email address for WIC vendors/retailers that have questions regarding EBT implementation. The email address is NCWICVendorQuestions@dhhs.nc.gov.

South CarolinaThe South Carolina WIC Vendor Management Advisory Committee met via conference call on Friday, November 18 and there were several updates to report.

Peer GroupsUpon request of the USDA, beginning January 1, SC WIC will change the way peer groups are determined. (Peer groups determine stocking requirements, as shown on Page 6 of the WIC Vendor Manual: http://www.scdhec.gov/Library/CR-009941.pdf ) Previously, peer groups have been determined based on the type of retail store (Chain stores are Type 1, Franchises are Type 2, and Individually-Owned stores are Type 3). Starting in the new year, peer groups will no longer be based on store types, but instead will be based on total SNAP-eligible food sales by store.

This means that individual stores within a chain or within common ownership may be classified within different peer groups.

The peer group assignments will be as follows:

Peer Group 1: Stores with $10M+ in annual salesPeer Group 2: Stores with $5M - $10M in annual salesPeer Group 3: Stores with <$5M in annual sales

SC WIC will notify retailers (both the corporate office and each store) of their new peer group, new stocking requirements, and will send an addendum to the stores’ WIC agreements, which is in effect until September 2017.

OverchargesStores and corporate offices should receive an email soon—if they haven’t already--with last quarter’s overcharges. Upon request by retailers on the call, SC WIC will begin emailing corporate offices with copies of checks so that stores can see the overcharges and mistakes and train their employees to avoid those mistakes. These emails will be sent quarterly.

EBTSC WIC’s parent agency, the Department of Health and Environmental Control (DHEC) needs to replace their department-wide Management Information System (MIS) due to compliance

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Issue 7

CFIC has received some requests from members about how to legally and respectfully deal with service animals in a grocery store. Use of service animals is regulated by the US Department of Justice through the Americans with Disabilities Act (ADA) and because of the sensitivity of the issue and the legal ramifications, retailers find themselves in an uncomfortable position when faced with an unruly or unhygienic animal in their stores. ADA regulations are very specific both to the definition of a service animal and how a business may address service animals. According to the ADA a service animal is either a dog or miniature horse that is trained to provide a service for a person with a disability. (A comfort, emotional support, or companion animal can be denied entrance to a food establishment such as a grocery store, because they are not trained to provide a service for a person with a disability.) If a customer is in your store with a service animal and it is unclear what service the animal is providing, a business may only ask the following two questions: 1) Is your animal required because of a disability? 2) What service or task is your animal trained to do for your disability?

You may not ask the person’s disability or for proof that the animal is licensed as a service animal. Service animals may be denied access to a grocery store in the following circumstances:

• If the animal is aggressive or exhibits threatening behavior.• If the service animal doesn’t remain in physical or voice control of its

handler.• If the service animal defecates or urinates inside or barks excessively.

Sometimes, however, it is a service animal’s job to warn its handler of surroundings or impending events, and it might do so with a bark or a growl.

• If service animal is wandering, socializing, sniffing food, in a cart, or eating.

• If the animal is not a dog or miniature horse.

CFIC will be developing palm cards for retailers to order and distribute to store managers and/or employees to help them appropriately address these situations. For all regulations that apply to commercial facilities and public accommodations, visit: https://www.ada.gov/regs2010/titleIII_2010/titleIII_2010_regulations.htm ☐

Service Animals in Grocery Storesreasons and this change will impact the WIC program. The Department must select a new EBT-capable MIS and is in the beginning stages of the bid process now. The Department’s goal is to procure the new MIS by March 2018 in order to begin the statewide EBT implementation process. Following procurement of the MIS, Kershaw County will pilot the state’s new EBT program beginning April 2019 and lasting the three required months until August 2019, when the EBT program will begin rolling out throughout the rest of the state. The goal is to finish EBT rollout statewide by December 2019, but the state is looking to accelerate the timeline of the project.

In order to prepare, SC WIC will soon be sending an updated vendor survey to all corporate offices to determine the readiness of WIC retailers. SC WIC will also build the Approved Products List (APL) based on UPC codes by having field teams collect these codes at retail stores. The state will be using a starter set of data from Florida as the foundation of the APL.

We will continue to keep you updated as we hear more and you can continue to check for updates on their website at www.scdhec.gov/health/wic/forvendors. The next meeting of the South Carolina WIC Vendor Management Advisory Committee will be held in person in Columbia in May. ☐

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CarolinasFoodCo

ANNOUNCEMENTS:

Sponsorship Commitments are Now Being Accepted

Office Closed.............................December 23 - 26, 2016 January 2, 2017

Scholarship Applications Due...............March 20, 2017

CFIC 13th Annual Convention................July 23-26, 2017

Carolinas Food Industry CouncilPO Box 1030

Raleigh, NC 27602Phone: 919-832-0811

2016 - 2017 CFIC Officers

President

Rod Antolock, Harris Teeter

First Vice President

Mack McLamb, Carlie C’s

Second Vice President

Karen Fernald, Delhaize America

Third Vice President

Omar Jorge, Compare Foods

Treasurer

Greg Adams, Piggly Wiggly

Chaplain

Ricky Knighton, Knightstaff Inc.

Ex Officio

Kenny Honeycutt, Piggly Wiggly

Executive Director

Lindsey Kueffner, CFIC

Merchants Distributors Inc.Lowes Foods, LLCPiggly Wiggly North CarolinaPiggly Wiggly North CarolinaW. Lee Flowers & Co. Inc.Ingles MarketsPiggly Wiggly Central Business OfficeJoyner's SupermarketsSpartanNash CompanyPiggly Wiggly #26

2016-2017 Board of Directors

Editor: Ann Edmondson Executive Director: Lindsey Kueffner

Nick CarlinoMike ClawsonGreg FisherGreg FloydRick GearyRobert Ingle IIAllen JacksonCliff JoynerSteve LittleBilly Matthews

James MesserJohn OwensChuck RoskovichHugh SmithPreston TaylorJames ThompkinsWilliam Wilder Jr.Lynn WillardBrian WrightShawn Yambor

Piggly Wiggly North CarolinaC&S Wholesale GrocersPublix Super MarketsTurbeville IGA PlusPiggly Wiggly #21Kingstree IGAPiggly Wiggly #61Lowcountry Grocers, LLCSoutheastern GrocersMarcin Stores, Inc.