The Tipping Point

Before the pandemic, some restaurants — notably Danny Meyer's Union Square Hospitality Group — began a trend away from tipping. There were several reasons, but I think the main one was that they didn't think it was fair for front-of-the-house servers to make tips while the kitchen workers were left out. There was also an aspect of class divisiveness that Meyer found distasteful.

Speaking at the Convenience Store News Foodservice Summit in 2016, Meyer told a group of c-store retailers that he found the U.S. culture of tipping unusual. "There's no tipping in Asia, and much less in Europe. Tipping came about in the U.S. because we wanted to be more like Europe 150 years ago, when really rich people tipped the help. It was a power thing."

Restaurants were one of the hardest-hit sectors during the pandemic. Many feared that workers wouldn't return without the lure of being able to supplement their pay with gratuities. Even Meyer reinstituted tipping, though he vowed to find a way to share the proceeds with his entire staff.

Tipping at convenience stores came to my mind while reading the new Vision Report from the recently formed Convenience Leaders Vision Group (CLVG). The CLVG is a think tank composed of convenience retail icons and trailblazers that conduct quarterly virtual meetings to discuss trends, challenges and disruptions in retail.

The first Vision Report came out late last month. It covered such topics as labor ("Applying the Gig Economy to the Labor Equation"), alternative fuels ("New Thinking on How Electric Vehicles Fit into the Future"), and several other so-called "Not So Little Things," such as eliminating logistics silos, self-checkout, last mile delivery, artificial intelligence and more.

The section on foodservice tipping caught my eye. "Matching the New Foodservice Model for Tips" put forth the notion that convenience foodservice workers are keenly aware that they can work in foodservice somewhere else and receive tips.

Kevin Smartt, CEO of Texas-based TXB Stores, allows tipping in the service-oriented segments of his stores. "I'm really shocked at the amount of tips that the employees receive. ... I definitely see the benefit in doing it," he said during a CLVG virtual meeting.

I wonder how Kevin handles tipping on non-foodservice items when a customer's basket includes both food and non-food items. Can you tip on just the service-oriented part of the ticket?

C-stores face the same dilemma as restaurants when it comes to the fairness issue. Just as Meyer grappled with the problem of kitchen workers being left out of the tipping pool, c-store leaders need to confront the issue of allowing tipping in only the foodservice section of the store. I assume some tip-sharing formula would need to be worked out for the entire store.