New rules hit Minneapolis corner stores hard

It's a slow Wednesday morning at the E and L Supermarket and Deli, a corner store in north Minneapolis. Owner Adil Albosaad has sold some soda, juice, cigars and bags of chips here and there. But a little before 11 a.m., he's put less than $72 in the register, well below the $130 he hopes to bring in before noon each day.

Albosaad says he recalls a day in 2015 when a customer came in and commented on the busy deli area and aisles of customers in the store. Now Albosaad and the cook at the hot food counter have the place to themselves.

"See how quiet it is," Albosaad said as he looked around the empty aisles. "Now it's really dead."

Albosaad's story is a common one as convenience stores across Minneapolis struggle to stay open amid what some store owners say is a slow but targeted campaign by the city to push them out. In recent years, the Minneapolis City Council passed various ordinances designed to improve public health and protect workers. The new laws on wage theft, sick and safe time, and requiring corner stores to carry fruits and vegetables have saddled business owners with new rules and paperwork.

Convenience store owners say they have suffered the most from the raised cigar prices, to $2.60 each, and the ban on flavored cigarette sales. The city also raised the minimum age to buy tobacco to 21.

Minneapolis City Council Member Cam Gordon, one of the co-authors of the menthol sales ban, said the council values small businesses and has programs to help them thrive. He said he hasn't heard complaints about the ban from convenience store owners in his ward. What the council did hear were concerns from young adults and others about how menthols and other tobacco products were marketed to them.

"Our intention isn't to harm their business but to protect the health and welfare of their customers and future customers," Gordon said.

Store owners say the menthol ban has had ripple effects on their business and customers. They have to send customers elsewhere for their menthol cigarettes or see them walk out seconds later to find a cheaper place to buy cigars. That lost revenue has meant reducing store hours and cutting employees from the payroll and store managers working long shifts day after day.

In Albosaad's case, he has one employee left, and he reduced the worker's hours at his store, at 1122 Lowry Av. N. Albosaad throws away rotting tomatoes and eggplants that the city makes him stock but customers don't buy. He said parents should be responsible for preventing their children from smoking but that smokers — regardless of age — will find a way to get their tobacco with or without the restrictions.

"It doesn't matter what we said, they're not going to change," Albosaad said of the City Council. "They're not helping us; they are against us. They come with a lot of rules, a lot of licenses. Our property tax going up every year. … They don't care about convenience stores."

Store owners said it's not only about the menthols. A pack of menthols or other cigarettes would mean a customer grabbing a candy bar, soda, bag of chips or other grocery item like milk or cereal. Nowadays, store owners are resorting to buying bulk snacks and sodas from Sam's Club or Costco because they can't meet the order minimums from vendors.

When Albosaad arrived in Minneapolis with his family from Iraq in 1994, he remembers his mother sending him out to find salt so she could make rice. Albosaad said he walked into a convenience store and asked for salt in the limited English he spoke at the time. When he left the store, he had a new job there. Albosaad laughs that he had been in Minnesota for only 10 hours.

"It's an easy job to get because you cannot speak English when you came here so people hire you right away for low wages," Albosaad said. "I moved my way up, I learned the job quick."

In 1997, he bought the building from the man who hired him and started his own convenience store with his family. Albosaad said the building itself is paid off and his tenants include a Chinese restaurant, a nail shop, a barbershop and a BoostMobile store. He put the building up for sale six months ago.

The city has ramped up outreach efforts to store owners. A key part of helping struggling convenience stores is acknowledging their challenges and that "there is not a one-size-fits-all" solution for them, said Zoe Thiel, manager for the small business team in the city's Community Planning and Economic Development department. The team has conducted store visits and spoken with owners about how they're faring under the various ordinances and connected them with community organizations for free business consultations.

"From what I've heard back, people are genuinely finding it challenging to replace all of the revenue that was coming from menthols," Thiel said. "That looks different depending on where you are and who your customer base is."

Some stores have tried to split their business into a tobacco shop so they could sell menthol products again. The number of tobacco shops in Minneapolis more than doubled after the sale of menthol products was banned in convenience stores in 2018, according to a report presented to the City Council in April. The uptick in tobacco shop applications led to council members voting for a one-year moratorium on tobacco licenses last year.

Other stores have tried to replace the lost menthol revenue by adding a deli and hot food section or becoming an Amazon package drop-off location, according to Thiel. The city has also encouraged store owners to apply for various grants and loans to help with costs of building renovations, equipment investments and utility upgrades.

Albosaad has tried to diversify his revenue streams. He warily invested in other products that might sell: colorful glass pipes, e-cigarettes, CBD gummy bears, pepper spray and knives. He rents out a hot food counter that sells chicken tenders and burgers to another local business. Neither has worked. Albosaad said applying for a city loan would not help because he likely wouldn't make enough money to pay it back.

For now, Albosaad said he's hoping to sell the building and invest the money in something else. At this point, he said he is "losing money just to stay open." He remembers going to the city's public meetings on the menthol ban in 2015 and talking to his father about the future of the business.

"When I went to the meetings and I saw them talking to us and I told my dad, 'You know, it's time to sell, we have to go,' he said, 'No, no it's still hope,' and I said 'No, there's no hope in the city anymore,' " Albosaad recalled.

By 12:05 p.m. Albosaad's register screen showed total sales of $91.67.

Marissa Evans • 612-673-4280