Times Tough for Full-Service Stations
Posted on: Wednesday, 23 January 2008, 21:00 CST
Jack Campbell believes this is the toughest time ever for the gasoline business.
Campbell, owner of Colonial Exxon on Bridge Road, has been in the business since 1962. He's owned the South Hills station since 1968.
Campbell's station is one of just a couple of full-service gas stations remaining in the city. These are stations that offer mechanic services along with gasoline pumps.
Another full-service station is Frosty's Chevron on Washington Street East.
In the past month, two full-ervice stations, the Exxon on MacCorkle Avenue in Kanawha City and the Exxon on Lee Street on the West Side, shut their doors.
The Exxon at Oakwood Road has stopped providing auto repairs and state inspections.
Campbell said it's the beginning of a bleak future for gas stations.
"I think you'll see a lot less gas stations than you see now," Campbell said. "With the competition and the market right now, these things are going to force out a lot of businesses."
Jan Vineyard, executive director of the West Virginia Oil Marketers and Gas Association, said many factors are behind the decline.
One is the escalating price in crude oil. Last week, the price of oil reached $100 a barrel.
Vineyard said that fuels competition, which hurts some businesses.
"It's simple economics," Vineyard said. "There comes a point in time that certain locations have to close. It's a tough business."
Another problem is credit card surcharges that stations have to pay.
Every time a customer uses a credit card at the pump, the station has to pay a 2.5 to 3 percent surcharge on the payment to the credit card companies.
With gasoline around $3 a gallon, Vineyard said the costs have become a real burden for station owners.
"The credit card companies are making more off the gas than the station owners," Vineyard said. "It wasn't that bad when gas was a lot less, but now it's become a problem."
Campbell said it's difficult for any gas station to survive just on profits from the pump. Colonial Exxon provides gas and also offers minor repair work, tune-ups and oil changes.
Campbell said credit card surcharges make it impossible to make any money from gas.
"We're selling gas at around $3 a gallon, but we're still paying the same surcharge," Campbell said. "Our fee has tripled, but our profits haven't tripled."
Last year, gas station retailers across the nation made an average 5.1 percent on fuel sales, according to figures from the Oil Price Information Service.
By comparison, retailers made about 9 percent in 2002.
Marvin Gray has owned Frosty's Chevron in downtown Charleston since 1996. Gray, 64, has been in the gasoline business for 37 years.
He is also the executive director of the West Virginia Gasoline Dealers and Auto Repair Association.
Gray said most of Frosty's profit comes from the repair work, but even that business is suffering.
He said car companies are offering longer vehicle warranties. In return, many car owners are going to dealerships for repairs.
"A full-service station these days is like a dinosaur," Gray said. "There are not many left."
Gray said gas stations in general are in a decline.
He said 30 years ago about 3,600 operated around the state. Now he said the number of stations is around 1,400.
Gray said he's not sure if Frosty's can survive unless the gas business improves.
"At my age, I don't have to worry about it too much," Gray said. "But if I was younger, I would probably be looking for a different line of work."
Source: Charleston Daily Mail
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