S-Dog
Rock Crawler
I work for a decently sized convenience store (with gas stations)company that has about 1000 stores up and down the east coast and we are making NO money whatsoever. As a matter of fact we are in the hole millions of dollars because of the gas prices going up. For the past 6 months our wholesale prices have been equal to or above the street prices. Add in people using credit cards (another 3% cut) and its a losing business right now. This is the case with most gas stations... The big profits are being made by the exxon/mobils and all the other big companies.. NOT the franchisees.
Let me see if I can explain how the market works for 80% of the gas stationd that are franchised or privately owned.(this will probable differ from those stations that are onwed by exxon/mobil etc.. themselves) The wholesale price comes in for the day at $3.00 a gallon.(this is the price that the delivery tanker fills his rig at)They deliver the gas to the store and the store is selling gas for $3.05. The store will then bump up its price to $3.08. At this point everything is fine and the store is still making its money. However, the next day the wholesale price jumps to $3.18. The store will not bump its price 10 cents that day. They will bump it 5 - 8 cents. At this point the store is losing money for every gallon they sell. You then need to take into account other stores in the area that might not raise their prices as aggressively to keep a hold of volume in the long run. and there is a HUGE issue.
This works in an opposite way when the prices go down... the store will hold the price up to recoup the losses of gas prices going up. The whole profit cycle works in the opposite way you would think.
Our company is in serious cutback mode because the prices have not gone down in ove 6 months. The muckity mucks are going nuts trying to figure out ways to cut the losses.
The big companies make out like bandits and leave the smaller companies and franchises in tough times.
Let me see if I can explain how the market works for 80% of the gas stationd that are franchised or privately owned.(this will probable differ from those stations that are onwed by exxon/mobil etc.. themselves) The wholesale price comes in for the day at $3.00 a gallon.(this is the price that the delivery tanker fills his rig at)They deliver the gas to the store and the store is selling gas for $3.05. The store will then bump up its price to $3.08. At this point everything is fine and the store is still making its money. However, the next day the wholesale price jumps to $3.18. The store will not bump its price 10 cents that day. They will bump it 5 - 8 cents. At this point the store is losing money for every gallon they sell. You then need to take into account other stores in the area that might not raise their prices as aggressively to keep a hold of volume in the long run. and there is a HUGE issue.
This works in an opposite way when the prices go down... the store will hold the price up to recoup the losses of gas prices going up. The whole profit cycle works in the opposite way you would think.
Our company is in serious cutback mode because the prices have not gone down in ove 6 months. The muckity mucks are going nuts trying to figure out ways to cut the losses.
The big companies make out like bandits and leave the smaller companies and franchises in tough times.
