Pain at Pump Hits Gas Station Convenience Stores [POLL]
Gas station owners don’t count on fuel for their profits. They want customers to fill up inside the convenience stores on potato chips, soda and coffee.
But, as gas prices continue to head upward, people are changing their driving habits, less fuel is being sold and fewer folks are heading inside for snacks.
“The average profit on a gallon of gasoline is ten cents or less. I know of many places that are making a profit of five cents or less,” said Sal Risalvato, Executive Director of the New Jersey Gasoline, C-Store and Automotive Association. “The profit on a gallon of coffee is about five dollars a gallon. So, if a retailer sells a gallon of gas for four dollars, he makes about ten cents. If a retailer sells a few cups of coffee that total a gallon, that’s about six dollars in sales and he makes about five dollars.”
“The object is to have customers that stop at your gas pumps, come inside and grab a cup of coffee or a bag of potato chips,” said Risalvato. “But, demand has changed and there are fewer gallons of gasoline being sold as people adjust to the high price. So, people are making fewer trips to the gas pumps as they adjust their driving habits. That is affecting the convenience stores. Fewer trips to the gas station means fewer trips inside for snacks.”
So, what is a gas station owner to do to stay afloat?
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“Good business practices require that small business owners raise their profit margins accordingly as the price of the product goes higher. But, competition is constantly putting a downward pressure on their profit margins. I always caution owners to make sure there’s enough profit margin on a gallon of gas when they sell it so they don’t get put out of business.”