Post-raid sales spike Store owners say Lake Side closing has made huge difference
By DAVID L. SHAW, Finger Lakes Times Sunday, January 25, 2009 12:11 AM CST
SENECA FALLS — Cigarette sales have surged for area convenience stores since the Cayuga Indian Nation closed its Seneca Falls store Dec. 10.
Owners of four stores have reported a tripling or quadrupling of business since the tribe’s Lake Shore Trading store on Route 89 closed shortly after a Nov. 25 law enforcement raid seized all of their untaxed cigarettes.
Now, the tribe’s lawyers have been able to get a temporary injunction to prevent criminal tax evasion charges until an appeal of the legality of the raid is decided in May or June. The five-judge state Appellate Division Court that granted the injunction also said the Cayugas could seek to have the seized cigarettes returned, if State Supreme Court Judge Kenneth R. Fisher agrees.
If that happens, the Nation may reopen its store.
And that worries non-Indian convenience store owners who’ve benefited from the closure.
Howard Strader, owner of D & M Grocery Store on Swift Street in Waterloo the past 11 years, said the numbers are startling.
“The increase in our business at this little store has been huge,’’ Strader said.
He said when the Lake Side Trading Store was open and selling untaxed cigarettes at deep discounts, his store sold about 165 cartons of cigarettes a week.
Since they closed, he’s been selling an average of 415 cartons a week. Each carton generates $31.20 in pre-paid state excise tax, plus 8 percent sales tax.
Half of that goes to the state and the other half goes to Seneca County.
“That increase has produced an increase in tax to the state from $5,230 to $13,155 a week, a difference of more than $7,000. That’s for one small neighborhood store,’’ Strader said.
He said tobacco customers who come to his store also end up buying other items — milk, soda, beer, snacks and groceries.
He said lottery sales are flat, speculating that smokers are having to pay more for cigarettes and don’t have that extra cash they might spend on tickets.
Strader said his store did $90,200 worth of business in December 2007. In December 2008, that number jumped to $184,000.
“I’ll be bummed out big time if they reopen the Cayuga store and they continue to sell untaxed cigarettes again,’’ Strader said. He said the Cayugas should either pay the same taxes as he does or not be able to reopen and sell untaxed cigarettes, especially in light of a new law signed by the governor.
Jack Kahn runs the Express Gas Plus Convenience Store on Auburn Road in Seneca Falls.
“I have definitely benefited from the Indian store being closed, as have many others in this area. I’d say cigarette sales alone are triple what they were before the store closed,’’ Kahn said.
Gasoline sales are also up slightly, but cigarette sales have generated more profit and sales tax income for the state and county than ever before.
“It would not be fair if they reopened and go back to doing what the judge has said is illegal all over again,’’ Kahn said.
“If they reopen and pay the taxes like everyone else, I have no problem with that,’’ he said. “Or if they exempt all stores from paying the taxes, which isn’t likely.”
Edward Feek, manager of the Nice N’ Easy convenience store on Fall Street, Seneca Falls, said his cigarette business also has tripled since Dec. 10, with other sales also up slightly.
Robert and Mary Plate took over Jean Jean’s Store on Washington Street in Waterloo 21⁄2 years ago.
Rob Plate said it was never a big volume store while Lake Side Trading was open, making enough to pay the bills and earn a small profit.
“But we’ve done very well since they closed. Cigarette sales in particular,’’ Plate said.
The store did about $300 worth of cigarette sales a week before Dec. 10. It’s been about $1,200 a week since.
“Sales of soda, beer, snacks are also up. Our profits are up. We’re seeing new smokers and smokers who left us to go to the tribe’s store coming back,’’ Plate said.
Daniel French, a lawyer for the Cayuga Nation, said the tribe’s plans for the store, along with a similar store in Union Springs, Cayuga County, may be announced Monday.
Options are to apply to Fisher for an order to return the seized cigarettes or to reach an agreement with Seneca and Cayuga county officials to return the items or buy new stock.
Sheriff’s deputies seized more than 17,000 cartons of untaxed cigarettes in the raids on the two Lake Side Trading stores.
“It would be wrong to go back to the way it was,’’ said Plate. “It’s not a level playing field. We’d lose back what we’ve gained.”