Since he bought it in 1983, the 7-Eleven on the corner of Broad and Wolf has been good to Joseph DiFabritiis. When he was ready to retire, he thought, it would be his nest egg.
Instead, thanks to the City of Philadelphia, it will be more like a goose egg.
As the owner of a store that gets almost one-third of its revenue from sales of cigarettes or tobacco, DiFabritiis, 59, is not alone.
Acting under color of protecting children, and as a faux legislative body, the Health Department early this year decided to suffocate permits to sell tobacco products in a two-pronged attack.
One prong is to reduce the number of merchants in areas it considers to have too many stores. The other prong is to ban sales within 500 feet of any school. Think of them as red zones.
The tactic is to deny a cigarette sales permit to any store in a red zone when it changes ownership.
More than half of the 60 7-Eleven stores in Philadelphia are in red zones. The regulation also affects Lukoil and Sunoco mini-marts and up to 1,500 small retailers — but not Wawas, because they are owned by the corporation and don’t change hands.
Thanks to the new rule, says Manzoor Chughtai, president of the Delaware Valley 7-Eleven franchisers organization, you can kiss goodbye the 35 additional stores — and the jobs — that 7-Eleven was planning for Philadelphia.
Why is 7-Eleven backing off?
Most stores would have to open without a cigarette sales permit. Depending on location, tobacco sales can account for 25 percent to 50 percent of gross revenue. If a store can’t sell cigarettes, it loses not just tobacco sales, but also sales of sandwiches, snacks, drinks, magazines.
The value of a store like DiFabritiis’ without a permit drops dramatically.
Bilal Barqawi has owned a 7-Eleven at Oxford Avenue and Large Street in the Northeast since 2002, and got trapped in the new rule because a school opened within 500 feet of him three years ago. Now, because the permit would be revoked, “I cannot sell it, I cannot transfer it to my sons, whatever investment I had was gone,” he says.
It’s kind of ironic that a city with a mayor who keeps yelping about “protecting” immigrants lets an overzealous health commissioner take an ax to 7-Elevens, the majority of which are owned by immigrants.
Health Department spokesman James Garrow says they “understand some retailers might be negatively impacted,” but the goal is to reduce smoking by children.
The retailers agree wholeheartedly on the goal, but are steamed by the tactics. If a retailer gets caught selling to minors (by undercover agents) three times in 24 months, the license gets yanked. They are OK with that.
At-Large Councilman Al Taubenberger is on their side. “No one’s arguing the health part,” he says, but taking away the ability to earn an income “is not fair and in some ways is un-American.”
The 500 feet from schools seems arbitrary. Why not 1,000 feet? Areas with greatest density? If too many stores sell the same product, some will go out of business. If not, they are serving a market.
Health says the high density is mostly in lower-income neighborhoods. That’s also true of soda consumption, but the reasons are more complicated than just accessibility.
Speaking of soda, just about all the stores affected by the tobacco regulation also are taking a beating from the beverage tax.
The issue is not smoking or whether it’s good for you. It is not. The store owners don’t want to see eighth graders puffing on Camel Lights. The issue is government overreach, allowing the Health Department to wreck the value of a business that sells a legal product. Why does Philadelphia seem set on driving small business, an engine of our economy, out of town?
The Health Department gives you a harder time if you are selling cigarettes and soda than if you are selling marijuana and beer, complains Barqawi.
The Chamber of Commerce has asked City Council to call on the Health Department to delay implementation of the regulation.
I’ll go further. If the Democrat-dominated City Council actually cares about the little guy, as they like to say, they will reverse this wrong-headed regulation that takes a sledgehammer to the value of businesses that have done nothing wrong.