merging associations
merging associations Food dealers, petroleum retailers find strength in numbers BY VANESSA DENHA-GARMO Gas station owner Amar Dalou is all for the merger: “ It is so competitive today.” Small business owners have a stronger voice and better buying power now that the boards of directors of the Associated Food Dealers of Michigan (AFD) and the Great Lakes Petroleum Retailers and Allied Trades Association have voted to merge the two trade groups into a single association. The merged association, now known as Associated Food and Petroleum Dealers, represents more than 3,900 small business locations in Michigan and Ohio. “Today, the retail food and beverage business is increasingly cutting across many categories. Service stations, liquor stores and independent supermarkets are all a part of our industry,” said Jane Shallal, AFD president. “Anyone who has run into a gas station food mart or a neighborhood gro- Jane Shallal cery store for a gallon of milk can see just how much the two kinds of businesses have in common.” Ed Weglarz, president of the Great Lakes Petroleum Retailers, also lauded the move. “The new strength in our numbers will bring better buying power and a more powerful voice in speaking to the Michigan and Ohio legislatures,” he said. “Small retail businesses play an important role in the economic health of our two Midwestern states, and they deserve recognition for it.” With both associations currently overlap in certain administrative functions and supplier relationships, the merger made sense. “We will enjoy economies of numbers by merging. Many of our gasoline retailers evolved into convenience store offerings over the years without proper and adequate experience and training,” said Weglarz, adding that the same happened with convenience store owners getting into the retail gas business. “This merger enables the two rather similar, but nevertheless different, business models to feed off the others’ experience and history.” The Associated Food and Petroleum Dealers, with Shallal acting as its president, will have its primary offices in Farmington Hills, with additional offices in Lansing. The new association will continue to provide vendor discounts, industry news, training programs and political advocacy for its members, but on a more substantial and powerful scale. Additionally, the organization’s increased membership will assist it in more forcefully tackling predatory pricing by merchandisers and other businesses. “I see my job as the president to protect the small business owner,” said Shallal. “We are competing with the chain stores and sometimes it is unfair competition.” Compared to an independent merchant, chain stores are able to buy larger quantities of products to sell at a reduced price. Shallal said that some companies won’t even distribute product to the independents. PHOTO BY DAVID REED The Associated Food Dealers of Michigan was founded in 1916 and represents more than 3,000 grocery stores, supermarkets and liquor licenses throughout the state. The Great Lakes Petroleum Retailers and Allied Trades Association has roots going back to 1929, when it was formed as the Service Station Dealers of Michigan. The group merged with the Ohio Petroleum Retailers and Repair Association in 2004 to become the Great Lakes Petroleum Retailers and Allied Trades Association. It represents more than 900 service stations and convenience stores in Michigan and Ohio. “The combination and expanded interests of the new association will enable us to expand the offerings to the membership base, and expand membership by having more varied programs available to the members. It doesn’t cost to be a member — it pays,” said Weglarz. “We will be a larger, more effective force when dealing with the governmental bureaus and the legislators in Lansing and Washington, D.C. We will be able to provide educational and training seminars for our members. Hopefully we will bring value to the members’ business, which will provide generational longevity, along with real and measurable value to being a member of the Associated Food and Petroleum Dealers.” Amar Dalou owns three gas stations and convenience stores, a Mobil in Clinton Township, a Shell in St. Clair Shores and a Marathon in Mount Clemens. He has been in the gas station and convenience store business for the past 13 years and says the merger will only help his business. “We give gas away today because the profit margins are so slim,” said Dalou. “The gas station today is more like a convenience store. You have to have a fast food, car wash or convenience store to make money today.” The 35-year-old married man with two children said that the Food and Petroleum Association gives owners like him a voice in Lansing and against bigger corporations trying to put the small businessman out of business. “It is so competitive today,” said Dalou. “The big corporations claim that they employ people but the truth is the biggest employers are the small businesses.” Over the years, the profit margins for gas station owners on gas have decreased and with payat-the-pump convenience, their profits have shrunk even more. Where they once may have made 10 percent on gas sales, that figure is now less than 7 percent — and they have to pay 2 1/2 to 3 percent on credit card use. So often the gas station owner does not make a profit on gas sales. The only way for the owner to make money is to offer other products for sale. “Being a member of the association gives us more buying power,” said Dalou. “The merger makes sense. They can only help us become stronger.” For additional background on the two groups, visit http://www.afdom.org/page.cfm/2/ and http://www.oprra.com/. 34 CHALDEAN NEWS APRIL 2006
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