Legislative, Regulatory & Legal

The news that Walgreens is to scrap its $9.4 billion merger with Rite Aid is unsurprising. The glacial pace of the Federal Trade Commission investigation and increasing signals that the federal government would disallow the merger have forced a rethink.  

Proposed cuts in food stamp benefits could cost the the retail industry billions — with supermarkets and discounters taking the biggest hit.    AlixPartners estimates that retail collectively stands to lose $70.7 billion during the next 10 years if the proposed cuts in the Supplemental Nutrition Assistance Program (commonly referred to as food stamps) turn into reality, CNBC reported. The budget proposed by the Trump administration calls for $191 billion in cuts to the program between 2018 to 2028.  

Fred’s Pharmacy is taking action to protect itself as the deadline for the Federal Trade Commission’s decision on Walgreens Boot Alliance’s proposed acquisition of Rite Aid merger draws closer.  

An accounting change could give a big boost to retailers' earnings.   The new Financial Accounting Standards Board, or FASB, revenue-recognition rule (ASC 606) goes into effect for public companies in 2018. One of the major implications of the new rule involves how the unredeemed dollar portion of company-issued gift cards, called breakage revenue, is recognized, according to a report by MarketWatch. The change will impact everyone who issues gift cards, including both online and offline retailers.    

A much-anticipated ruling on website accessibility has been issued out of the Southern District of Florida. The ruling in Juan Carlos Gil v. Winn-Dixie Stores (case no. 16-23020-civ-Scola; S.D. FL 2017) requires the attention of businesses across the country that host websites.    

Wages

California: A state overtime pay bill that matches the salary threshold of the Obama administration’s overtime regulation at $47,476 passed the Assembly and now heads to the Senate. The federal regulation is currently on hold due to a court injunction and Labor Secretary Acosta is expected to rescind the rule. New York recently instituted an overtime rate at a similar level.

Wisconsin has become the third state to legalize the use of the automated robots. Virginia and Idaho passed passed similar legislation earlier this year.    The Wisconsin law places an 80-pound weight limit on the robots, and doesn’t permit the machines to travel faster than 10 miles per hour. The robots are also required to have a person in the loop to take over control in case something goes awry, according to ReCode.  

Sears Canada is looking to reinvent itself.    The long-struggling department store retailer said it expects to close 59 of its 225 stores and cut 2,900 of its approximately 17,000 workers as part of its restructuring. Sears Canada filed for protection from its creditors under Canada's Companies' Creditors Arrangement Act, the equivalent of Chapter 11 bankruptcy, on Thursday.