I remember a time a decade or two ago where “convenience stores” were willing to mark their gas prices as low as they could to still make a minimal profit (2 or 3 cents per gallon was all my grandfather profited towards the end of his run as a store owner in the early 80’s), and then rely on the customers to come inside and spend a bunch on pop, hot dogs, potato chips, candy, cigarettes, etc. in order to turn a healthy profit. Believe me, when you charge 99 cents for a 32oz pop from the fountain, you’re making a nice profit, and when you buy 8 hot dogs for $2 dollars and 8 buns for $0.60 and then sell those same 8 dogs for a total of $12 dollars, you’re doing alright.
But that has changed. Gas must be as profitable as humanly possible for these stores. They’ve got to make a killing on every gallon, just like they do on every hot dog inside. Why? Because we can pay at the pump. We can stick a credit/debit card into a slot, start the pump, fill the car, return the nozzle, grab the receipt, and hit the road. The convenience store/filling station has just lost a big potential profit be me not coming into their store. So they’ve gotta get it where they can, and gas prices suffer even more because of it.
I’d like to see a station go back the other way. Take away the pay-at-the-pump option and drive traffic back into their store, where, while preparing to pay, I (and most others) will grab a cup of pop, a pack of gum, a candy bar, a bag of chips…whatever…and the shopkeeper will now show a profit again. Think about it when you whip out your credit card to “pay at the pump”. Your interest in saving a walk of 40 feet and possibly having to stand in line behind…heaven forbid…one or maybe even two people, is now helping me – and YOU – pay more for your gas.
8 responses so far ↓
1
jenjw4
// May 6, 2008 at 7:47 am
I can see your point, but I doubt it will work.
I always pay at the pump. Because I almost always have my kids with me. It would be such a pain to take them with me into the grocery store. They would also be asking me to buy them candy, soda, etc.
And it seems that would just be shifting the amount spent from gas to junk food… what does it matter where the gas station makes the profit if I’m still spending just as much or more?
2
BJ Stone
// May 6, 2008 at 10:51 am
The difference is in the profit MARGIN on each item. If the shopkeeper can’t get his 30% markup on candy/cigs/pop or 80% markup on hotdogs, he has to make it up by charging more at the pump. So it does make a difference WHERE the profit comes from.
3
Jennifer
// May 7, 2008 at 7:53 am
BJ,
I can see where that would matter to the shop owner, but to the consumer, I’d really rather pay a bit more for gas than have to go into the gas station, especially when it means undoing kids from car seats, etc..
And, while a shopkeeper can charge a higher mark-up on the base price of items like soda, hotdogs, etc, someone will have to make the food items, stock the soda, etc, and someone will have to ring all these items up. Someone who will require a paycheck.
Aren’t employee paychecks and benefits a big part of the expense of most businesses? Doesn’t it seem that “pay at the pump” would save the average shop money by allowing them to have less employees?
Jennifer
4
Pudge
// May 7, 2008 at 1:03 pm
I tihnk some are missing the point. the store owner already has the employees/inventory. If he sells more items with higher profit margin, he doesn’t need as high a profit margin on gas…hence lower gas prices.
But, until we get that cowboy out of the White house, gas prices will continue to soar, because he and his friends make money every time the cost of gas goes up.
5
Jennifer
// May 7, 2008 at 2:16 pm
Pudge, more sales would lead me to think the store would need more employees or at least more hours worked (if the sales are going to be high enough to offset gas prices I would think it would have to be a pretty brisk trade, at least during common commuting times).
I just really doubt going in to purchase junk would offset high gas prices enough to make the trade-off (the consumption of such junk, and in my case, the expansion of my waist!) worthwhile.
6
BJ Stone
// May 7, 2008 at 4:21 pm
Five years ago, you couldn’t pay at the pump. It’s a new, unnecessary convenience that has now spoiled you to the point where you don’t mind paying more for gas (!) for the “convenience” of not walking into the store. Something you did without questions five years ago.
Our country is now about two things: easy and now. It has to be simple, and I have to do it now. That’s all we give a shit about. With each passing day, we become more selfish and greedy (not saying that specifically to you, Jennifer, just generalizing about us as a whole).
7
mortonmalaise
// May 12, 2008 at 3:32 pm
BJ,
5 years ago? Really? I’ve been driving for 12 years, and I don’t remember ever having to go inside the gas station to pay., unless I was using cash. Maybe it was different in South Florida than here.
I do remember how shocked I was when I first moved back to Illinois in 2002 and learned that you could actually pump BEFORE you paid at 90% of the gas stations. Pump before you pay is unheard of down there, even at the bumpkin stations in the center of the state.
8
BJ Stone
// May 12, 2008 at 9:29 pm
It was that way in Nevada and California when I left there, too. Had to pay before you pumped. But you had to go INSIDE to pay…there was no pay at the pump option in Nevada in 1996.
BTW, six years ago (January, 2002, AFTER 9/11 happened), I was buying gas in Princeton, Tiskilwa, and Henry, Illinois on my daily trips back to Peoria from Princeton…and I was paying .99 cents per gallon. Ninety-nine cents! And I wasn’t paying at the pump then, either.
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