Retailer joins tax bill bonus club

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Retailer joins tax bill bonus club

By Gina Acosta - 01/03/2018

A small grocery chain in the Northeast is starting what could become a fast-growing trend across the retail industry.

Delaware Supermarkets, which operates six ShopRite stores in Delaware, is handing out $150 bonuses to 1,000 non-management and union-represented employees as a result of the recent tax reform bill being signed into law. The bonus is in addition to holiday and performance bonuses.

ShopRite's move could be the tip of the spear when it comes to how the tax reform bill spurs retailers to pass their tax savings on to workers.

"Our ability to provide bonuses and training to our employees demonstrates the far-reaching implications of this tax reform," said Christopher Kenny, president and CEO of Delaware Supermarkets. "We have a renewed optimism for the local and the national economy, and this important legislation better positions us for future growth."

The company, locally known as Kenny Family ShopRites, is following in the footsteps of such large corporations as American Airlines, Southwest Airlines, AT&T, Boeing and Comcast. 

Melissa Kenny, director of sales and marketing for the company, said: "This legislation benefits those of us who count on Main Street budgets for our livelihoods, and it's a privilege to share the benefits with the men and women who work so hard at ShopRite. It makes it possible to succeed in a very competitive industry."

Delaware Supermarkets was founded in 1995 by Bernie Kenny, who purchased the ShopRite location in Stanton. ShopRite is part of the Wakefern Food Corp., a supermarket cooperative that dates back to 1946. Wakefern began operating under the ShopRite banner in 1951.

"We're committed to our customers, our fellow small businesses and our communities," Christopher Kenny said. "Investing $300,000 in our employees' future shows that we are also committed to our team members. This tax bill allows us to help create a vibrant economy in our home state."

In December, the nation’s leading retail and consumer goods trade organizations praised passage of tax reform legislation as a holiday gift for retailers and Americans.

The National Retail Federation, the Retail Industry Leaders Association, The Food Marketing Institute, the Grocery Manufacturers Association and the National Grocers Association heaped praise on lawmakers and President Donald Trump for passage of tax reformer legislation they described as comprehensive, overdue and historic.

“Passage of tax reform is a major victory for retailers who currently pay the highest tax rate of any business sector, and for the millions of consumers they serve every single day,” said NRF President and CEO Matt Shay. “Our priorities were clear: reform must jumpstart the economy, encourage companies to invest here in the United States, increase wages and expand opportunities for employees, and protect our small business community, of which the vast majority are retailers.”

Retailers have traditionally paid one of the highest effective corporate tax rates. As a result, a fairer and more competitive tax code will give retailers the ability to modernize stores, invest in their workforce and continue to transform the shopping experience for consumers.

“Food wholesale and retail are low margin, high tax industries that have been waiting for just this type of relief to spur investment and create jobs,” said Jenifer Hatcher, FMI's Chief Public Policy Officer and Senior Vice President for Government Relations. “FMI and its members are anxious to see this legislation implemented as quickly as possible.”

National Grocers Association President and CEO Peter Larkin characterized the legislation as a one-in-a-generation type of reform that would benefit independent retailers represented by NGA.

“For years, independent supermarket operators have tried to keep pace with a rapidly-changing marketplace while operating in an industry with high effective tax rates on just 1% to 2% profit margins. This new weight lifted off their shoulders will allow stores to invest more in their companies, employees, and communities,” Larkin said. “We’re pleased this historic bill lowers rates for both C-corporations and pass-through businesses, and retains the many important policies that will significantly help entrepreneurs hire additional staff, expand offerings, and upgrade their stores.

The tax reform is also expected to benefit manufacturers, with Pam Bailey, President and CEO of the Grocery Manufacturers Association, calling it the most significant piece of tax reform legislation in 30 years.

“It will help spur job creation within the grocery manufacturing industry and provide tax relief for working families,” Bailey said. “The food, beverage, and consumer products industry has long urged action to fix our broken tax system, which must work in favor of both consumers and manufacturers.  We applaud Congress for its hard work to pass this bill to support American jobs and American families.


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