| Author |
Message |
William Huber (Solipsist)
Intermediate Member
Username: Solipsist
Post Number: 1266
Registered: 9-2001
| | Posted on Tuesday, August 26, 2003 - 8:14 am: | |
Peter,
Another problem is there are so many lotto games for people to choose from now. I've often run across many dolts that ponder "which one is the lucky ticket?'" They just stand there like they have all the time in the world where most of us don't. JUST BUY A TICKET FOR GODS SAKE THEN LEAVE!!
I would rather see more convince stores sell them out of a vending machine.
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PeterS (Peters)
Intermediate Member
Username: Peters
Post Number: 1374
Registered: 1-2003
| | Posted on Monday, August 25, 2003 - 8:24 pm: | |
My girlfriend's Mom owns a small conv store near Yosemite. I argue with her that she needs to get rid of the lotto. A lot of people stand in line to buy high-profit items while the clerk is paying (and verifying) a $1.00 scratcher that the store makes a nickel on. She says that the bottom line of the scratchers plus the lotto is good dollars. If I owned the store, out would go all of it! I hate waiting in line behind some yak that is getting a free-ticket scratcher paid, you know, the clerk keeps swiping it back and forth so the computer to read it and then has to punch the numbers in by hand...I'm alseep..Jeeeesh! |
Thomas I (Wax)
Junior Member
Username: Wax
Post Number: 157
Registered: 7-2003
| | Posted on Monday, August 25, 2003 - 7:02 pm: | |
http://www.csnews.com/csnews/index.jsp
While perusing this site - hit "Profit Guides" on left side - that'll take you to another page, with Beer/Dairy guides - note the links on top, too. Baby food and diapers are highest margin items. Sugar... well, if a bag breaks, you're out of sugar profit for the next 3 cases. Marshmallows? Plan on throwing 11 bags away if you buy a case of 12. Better to buy 3 bags on rare sale elsewhere just to fill the shelfspace...
Doorbusters (1 cent profit items) bring 'em in, but you've got to bring them back again to spend on profitable items. Greedy pricing and/or bad service? They won't be back.
It's a competitive market - I managed several C-stores after "growing up" in Grandfather's 3 supermarket biz *and* farming 300 acres. Lesson 1: Food doesn't grow in cans. Lesson 2: The only turnover you want to see is on and off the shelf, not behind the register.
Suppose you get past the planning stages into brick-and-mortar: When hiring, tell interviewees all the bad stuff, then ask if they still want to work there. Weeds the list down quick - keeps the staff that is hired on their toes, (hey, they agreed to do...) and employee turnover, low. |
jeff ryerson (Atheyg)
Member
Username: Atheyg
Post Number: 399
Registered: 8-2002
| | Posted on Monday, August 25, 2003 - 4:16 pm: | |
Peter is right alot of mom and pops went out of bus due to the mandatory double wall tank regs
I sold my car wash in 96 right when they were due for the upgrade, the new owners sealed the tanks and stopped selling gas, it wasn't worth $100k to keep the fuel
Many areas did have fuel tank rust issues though, especially in the Bay area of Cal where the electrics generated from nearby buildings would cause the tanks to rust and fuel would leak into the ground and find its way into water supplys, the Palm Springs Desert area where I had my wash you never had that problem and the underground tanks can last 50 years. |
PeterS (Peters)
Intermediate Member
Username: Peters
Post Number: 1372
Registered: 1-2003
| | Posted on Monday, August 25, 2003 - 3:24 pm: | |
The government racket that created MTBE also created 'testing standards' (in which the lobbying was funded by Big Oil) that were targeted against the mom & pop gas stations, i.e.: If the tests found any leaks (which just about every gas tank -at stations- in America have), the tanks have to be dug up and replaced, thus driving the mom & pops out of business. How many times have you driven past a station owned by an oil company that is having their tanks dug up? I hate these companies.... |
djmonk (Davem)
Member
Username: Davem
Post Number: 382
Registered: 1-2002
| | Posted on Monday, August 25, 2003 - 3:15 pm: | |
I meet a lot of owners in my biz. One thing i keep hearing is you want to pump 100,000 gallons a month at least.
Also branded food inside is big, but i believe is geographically sensitive? Here in Ct it flops usually. |
Martin - Cavallino Motors (Miami348ts)
Senior Member
Username: Miami348ts
Post Number: 5832
Registered: 5-2001
| | Posted on Monday, August 25, 2003 - 2:56 pm: | |
This is great information. It is amazing to see the vast knowledge you can tap into on Ferrari Chat and get grade A information.
Keep them coming guys. Thanks a lot so far.
As soon as I am ready to talk about the concept I will. Can not indulge quite yet.
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j scott leonard (Jscott)
Member
Username: Jscott
Post Number: 534
Registered: 1-2002
| | Posted on Monday, August 25, 2003 - 9:50 am: | |
Jim: Long time since I worked with Southland. Amazing that many things remain the same. I worked in the Pacific Division in Pleasanton. Had a good friend named Tom Kanawyer who I think is still with them. It was a tough business and great training ground for me. Prepared me for the position I now have. Lots of stories! |
jeff ryerson (Atheyg)
Member
Username: Atheyg
Post Number: 395
Registered: 8-2002
| | Posted on Monday, August 25, 2003 - 8:54 am: | |
I averaged .05 - .07c per gallon with my car wash, premium fuel was about .15-.20 cents, we were unbranded so I bought from whom ever was cheapest at the time
I hated dealing with fuel, having all that cash and credit tied up to make $500 on $10,000, you also had fuel delivery issues at times
ARCO AM/PMs goal is to make $1.25 extra on every customer that buys gas, this was about 6 years ago so I don't think you can achieve this with the Point of Sale pumps today |
Jim Schad (Jim_schad)
Intermediate Member
Username: Jim_schad
Post Number: 1749
Registered: 7-2002
| | Posted on Monday, August 25, 2003 - 8:24 am: | |
711 is getting its ass kicked now by Costco, Sams, Albertsons, walmart etc. The grocery stores are laughing because it wasn't so funny when the C store started selling their 100 most popular items, but now that they are selling gas it is killing them. A grocery store can sell gas at a loss and call it advertising costs to get you in store. And the total % is minimal to them.
C Stores need the gasoline profits. Gasoline has helped 711 make their quarterly #'s time and time again.
Jscott is right. Pay at the pump is a must have in todays world. RaceTrak avoided it for years to avoid paying the fees and also to make you come inside. Can'tdo that anymore. CRIND is what they call it...Credit Reader IN Dispenser.
We also messed with offering 5 grades of gas vs 3. Trying to get folks to upgrade to the more profitable premium blends. Best way is to offer 3 grades and do 10 cent spreads, but have your middle grade with a 12 or 14 cent spread. like this
REG 125.9
MID 139.9
PRE 145.9
Jscott is right on the margins on inside..forgot about that. 30% or better is avg.
Also, you can get funds from a major brand to upgrade your store. Citgo gave away tons of upgrades just to gain market share at any cost.
Majors used ot have better brand loyalty due to the Texaco/Exxon/Mobil gas credit cards. Doesnt' matter too much now.
711 would dump citgo, but they are in too deep with them and the VP of gas is from Citgo's Trading Floor. was the GM for Supply and Logistics there. Also they are concerned that people would doubt the quality of Super 7 Gasonline with no brand behind it. |
Jim Schad (Jim_schad)
Intermediate Member
Username: Jim_schad
Post Number: 1748
Registered: 7-2002
| | Posted on Monday, August 25, 2003 - 8:15 am: | |
I priced gas for 7-Eleven for 4 years. I did all the NE and Texas, 567 stores $390MM in gross revenue. Lady down the hall did Florida. Citgo has better brand value out east than anywhere else.
7-Eleven budgets a profit if 13 cents per gallon, but in reality they make anywhere from 7 to 10 cents and the trend is downward due to people like RaceTrak/QuikTrip.
RaceTrac makes 2.5 cpg, QuikTrip about the same. They make up for it on volume. Avg RaceTrak/QT store does about 250,000 to 500,000 gallons per month. 7-Eleven store average is about 60,000 gallons per month. Highest store we had did something like 185,000 gallons per month.
So RT/QT make money by sticking to the basics..beer, cigs and gas. I heard RaceTrak was in financial trouble or that there equation wasn't working so well.
RaceTrak makes or saves money by buying off corner lots for 700K vs paying 1.5mil for the corner lot.
I don't know their inside sales ratios. 7-Eleven was something like 60K outside sales and 35K inside sales a month. Also, don't get tricked or confused by revenue # from gas. See what the profit or cpg was. As prices go up so does your revenue, but costs rise with it. Best way to make money is to raise prices as soon as cost rise is coming then hang on to it and let prices drop gradually. My stores probably lost $150K a month based on the stores slow reaction to change prices I told them to.
I don't price shop gasoline, I buy what is close or at a store I like. But it would amaze me when I would raise or lower the price 1 penny to watch the volumes rise/fall.
If you have any questions let me know. |
dave handa (Davehanda)
Intermediate Member
Username: Davehanda
Post Number: 1711
Registered: 5-2001
| | Posted on Monday, August 25, 2003 - 8:14 am: | |
The only people making money on gas are the refiners.... |
j scott leonard (Jscott)
Member
Username: Jscott
Post Number: 533
Registered: 1-2002
| | Posted on Monday, August 25, 2003 - 8:04 am: | |
Hey Martin: 25 years ago I was a regional manager with Southland Corp. (7/11). As I remember, the margin on the in-store product was about 35 percent. Gas was very low. Often only 1-2%. They used gas as a lure to get people to stop and come into the store. That is why they don't like the pay at the pump method, you don't have to come into the store where you will buy something else. Things have probably changed much however in the last 25 year. I'm interested in what your new concept is. |
Mark (Study)
Member
Username: Study
Post Number: 708
Registered: 10-2001
| | Posted on Monday, August 25, 2003 - 8:04 am: | |
My friend in Tampa owned a busy Shell station.
He said he made nothing on the gas sales...just enough to cover his fixed cost.
All profit came from sale of Food and cigs.
He had a nice life, but biggest pain was long hours and poor quality of emplyees. (not quite a 24 hr store but 18 hours a day 365 days a year. |
Martin - Cavallino Motors (Miami348ts)
Senior Member
Username: Miami348ts
Post Number: 5831
Registered: 5-2001
| | Posted on Monday, August 25, 2003 - 7:57 am: | |
Can you guys give me some insight?
how much is on gas?
how much percentage is gas vs store
I am thinking of a new gas station concept!
Anybody experience with independant gas companies, no major syndicats. |