Exxon Mobil Record Profits and Local Stations
By utterz on Jul 3, 2008 in In the News
Exxon Mobil Record Profits: Are the Local Stations Getting Any Of It?
Mobile post sent by KenyaOA using Utterz. Replies. mp3
By utterz on Jul 3, 2008 in In the News
Mobile post sent by KenyaOA using Utterz. Replies. mp3
here’s the way i understand it…
Most Exxon stations are franchises, so not directly owned by Exxon.
As fuel prices rise, more people are using credit cards to fill up. These stations then must pay fees for each credit card purchase which cuts into their profit.
Gas stations are currently afraid to add this cost to the price of gas since customers are already so angry about how expensive a fill up is.
Historically, gas stations have made must of their profit from the store. People fill up, but then come in to buy food, drink, cigarettes. This is why you rarely see a gas station without a convenience store attached.
So the gasoline itself is a loss leader.
it gets you into their store.
The problem is that most people can’t afford to buy anything in the store these days. They drive up, use their credit card, gas up, and leave. the gas station is left paying the credit card fees and are not selling any goods.
This is why Exxon announced they are getting rid of any stations they own. It’s a sucker’s game.
kenya says: I was really pointing out the irony of the situation that the oil companies could be making so much money but the local stations are losing money. If all the local stations close, who’s going to sell the gas?
true. who will sell gas if Exxon doesn’t? suckers.
jay dedmans last blog post..VIDEO: what_will_eat_us
kenya says: Jay, Check this out:
Exxon Will Sell Off Some Gas Stations Move Will Affect Small Independent Operators
The interesting part is this:
But it will mean the end of small independent gasoline station operators such as Sohaila Rezazadeh, who owns an Exxon franchise in Oakton but pays rent to Exxon, which owns the land. Rezazadeh, who has complained about rising rent and tight profit margins, has not been able to afford new gasoline supplies for the past week. After 12 years as an Exxon dealer, she is closing her doors today.
Good article. as we know, the small businessman is the one who is getting squeezed the most. The big myth of free markets is that it opens up competition for all.
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[...] what happened to my local Exxon station, one of only two gas stations in Oakton, Virginia. I even Uttered about it. I noticed some time ago that it no longer displayed prices on the sign. Later I noticed that [...]