Gas prices in St. Mary's make the news

[Danzig]

A gasoline price war erupted in St. Mary's County last week after one station slashed its price for regular to $1.999 a gallon and spurred three others to follow suit, giving drivers some hope of relief at the pump.</NITF>
<NITF>But the price dip proved fleeting.</NITF>

Maryland regulators quickly stepped in and told the stations that their prices were too low. They needed to go up by 5 cents..............................

http://www.washingtonpost.com/wp-dyn/content/article/2005/05/05/AR2005050502032.html
</NITF>
In the most recent incident, last Tuesday, a state investigator questioned operators of a BJ's, Sheetz and two Wawas about their $1.999-a-gallon prices after receiving a complaint from Burch Oil, officials said...................


Late in the week, several stations were again selling gas for $1.99 a gallon. State officials said the lower prices appeared permissible because wholesale prices had declined.


</NITF>

 

[Pegster710]

This gas issue is really something! As often as prices change, it looks like a roller coaster!

 

[Tonio]

Since Burchmart was founded, its gas prices have always been higher than the competition. Unless the company is digging and refining its own oil, I don't see the justification for the higher prices. I'm irritated that the company went crying to the state government.

 

[Railroad]

I gassed up at BJs during that time. They were out of Regular and in fact a truck pulled in to vacuum the tank dry. In return for the inconvenience, the operator of the BJ's gas station said, BJ's was selling 93 at the same price folks would have paid for 87.

It would be interesting to know how much these gas stations are actually paying per gallon of gas.

 

[Tonio]

It would be interesting to know how much these gas stations are actually paying per gallon of gas.

I agree. I'm sure that BJ's and WaWa and Sheetz get better prices because they buy in bulk, while Burchmart has only seven locations. But if you don't count the Dash Ins (32 locations), Burchmart is still higher than many of the other locally owned stations.

 

[Oz]

You forgot to quote this part of the article, stating that it is ILLEGAL to sell fuel below cost in Maryland:

"The sudden fluctuation in the Lexington Park area was the result of a little-noticed Maryland law that took effect in 2001. The General Assembly mandated that stations cannot charge less than what they pay for gas -- unless they're lowering prices to compete with a nearby station."

A typical pool rate for a MAJOR (100,000 gallons +) fueling station is in the dime range, which means about $10,000 in GROSS profit per month. Payroll will easily consume over half of that, given the number of hours that these places operate. The remainder won't pay for the real estate, taxes, electricity, insurance, etc, etc, etc.

Before you guys go busting down Burchmart, you should look at the top of these pages. I don't see Sheetz, Wawa, and BJ's advertising here. I don't see them supporting community organizations with donations, advertising, and manpower the way Burch Oil Company does.

Gas prices need to be competitive. But try to find Louie Sheetz in St. Mary's County, or a Wawa, or BJ's corporation manager, when you need a donation for your Church, kid's soccer team, or the local high school athletic boosters.

Did I mention that it's illegal to sell gasoline BELOW COST in Maryland? No community benefits if there's one less family owned, community oil distributor in every county thanks to these fast food places disguised as gas stations.

 

[Cletus_Vandam]

You forgot to quote this part of the article, stating that it is ILLEGAL to sell fuel below cost in Maryland:

"The sudden fluctuation in the Lexington Park area was the result of a little-noticed Maryland law that took effect in 2001. The General Assembly mandated that stations cannot charge less than what they pay for gas -- unless they're lowering prices to compete with a nearby station."

A typical pool rate for a MAJOR (100,000 gallons +) fueling station is in the dime range, which means about $10,000 in GROSS profit per month. Payroll will easily consume over half of that, given the number of hours that these places operate. The remainder won't pay for the real estate, taxes, electricity, insurance, etc, etc, etc.

Before you guys go busting down Burchmart, you should look at the top of these pages. I don't see Sheetz, Wawa, and BJ's advertising here. I don't see them supporting community organizations with donations, advertising, and manpower the way Burch Oil Company does.

Gas prices need to be competitive. But try to find Louie Sheetz in St. Mary's County, or a Wawa, or BJ's corporation manager, when you need a donation for your Church, kid's soccer team, or the local high school athletic boosters.

Did I mention that it's illegal to sell gasoline BELOW COST in Maryland? No community benefits if there's one less family owned, community oil distributor in every county thanks to these fast food places disguised as gas stations.

Do you have similar concerns over the Target, Lowes, Staples, and other large format stores that have come to St. Mary's County? Lowes has put a big hurting on the little local hardware stores.

It's a hard sell to tell people "come shop at my store and support a local business in exchange for higher prices and less selection". Regardless of personal opinion, the Mom and Pop stores are falling to wayside because of this.

Not saying that I agree or disagree. I shop at Lowes and also go to the local Ace Hardware when necessary. But, when it comes time to buy 100 2 by 4's to finish my basement, the local hardware stores are way too expensive.

 

[Tonio]

Before you guys go busting down Burchmart, you should look at the top of these pages. I don't see Sheetz, Wawa, and BJ's advertising here. I don't see them supporting community organizations with donations, advertising, and manpower the way Burch Oil Company does.

Gas prices need to be competitive. But try to find Louie Sheetz in St. Mary's County, or a Wawa, or BJ's corporation manager, when you need a donation for your Church, kid's soccer team, or the local high school athletic boosters.

Did I mention that it's illegal to sell gasoline BELOW COST in Maryland? No community benefits if there's one less family owned, community oil distributor in every county thanks to these fast food places disguised as gas stations.

Good points, Oz. I agree completely that local companies like Burchmart care more about their communities.

I'm saying that I don't agree with the law cited in the article. I think it hinders competition, almost like a form of welfare for local companies. A local company can never compete with the big boys on price alone, so it has to compete in other ways. Dyson's Lumber in Great Mills knows this. When I buy wood, I go to Dyson's instead of Lowes because not only is the quality better, the staff is ten times more helpful. I'm sure there are ways that Burchmart can make a competitive end-run around the WaWas and the Dash Ins.

 

[Oz]

Do you have similar concerns over the Target, Lowes, Staples, and other large format stores that have come to St. Mary's County? Lowes has put a big hurting on the little local hardware stores.

It's a hard sell to tell people "come shop at my store and support a local business in exchange for higher prices and less selection". Regardless of personal opinion, the Mom and Pop stores are falling to wayside because of this.

Not saying that I agree or disagree. I shop at Lowes and also go to the local Ace Hardware when necessary. But, when it comes time to buy 100 2 by 4's to finish my basement, the local hardware stores are way too expensive.

The thread was about gas prices. You can hardly compare a commodity item like gasoline, to hard goods and services. That's an entirely different conversation.

The only reason to sell something below cost is to remove competition and control the market. Walmart has lawsuits against them for this practice. Competition is one thing, but when you sell below cost, you become predatory. That's not competition, (a) because a business cannot survive without profit) and (b) because your motive is to eliminate the competition and control the market leading to higher profits in the future.

The super-stations use fuel to bring people into their high profit food and convenience stores. I use them too, just like everyone else here. But 90% of my fuel will come from the Burch Oil's and the local guys because they are good for our community.

Now, moving away from the commodity of gasoline to supplies and hardware.

My neighbor finished his basement last year. Dean Lumber had the best prices on 2x4's and drywall, but Lowes had a better price on the insulation. When I sealed my driveway last fall, Dyson's had the better price on asphalt sealer. You probably would have guessed Lowes. So the big box retailers merely have the perception of being cheaper, when in reality that is not always the case. Selection? Sometimes that is perception too. The national retailer has a wide selection of the cheapest no-name brake pads made. The local guy has a smaller selection of that same "value-priced" brake pad, but an entire stock of Raybestos brand with higher quality, priced competitively. Savings $10 now for lower quality may cost you the 10 feet you need to avoid an accident in a panic stop. Hardware? What's your time worth when you're wondering around a big store, but you could have gone to True Value or Ace, asked the guy for what you need and been home starting to repair that faucet already.

I understand your point, and local business must adapt and remain competitive. However, the best thing you can gain from my message is to shop around when you need the 100-2x4's you mentioned you'll need soon.

 

[truby20]

Before you guys go busting down Burchmart, you should look at the top of these pages. I don't see Sheetz, Wawa, and BJ's advertising here. I don't see them supporting community organizations with donations, advertising, and manpower the way Burch Oil Company does.

Gas prices need to be competitive. But try to find Louie Sheetz in St. Mary's County, or a Wawa, or BJ's corporation manager, when you need a donation for your Church, kid's soccer team, or the local high school athletic boosters.

Did I mention that it's illegal to sell gasoline BELOW COST in Maryland? No community benefits if there's one less family owned, community oil distributor in every county thanks to these fast food places disguised as gas stations.

I thought Burch Oil had a pretty diverse portfolio? Don't they make the majority of their money in the heating and cooling business? I really don't think complaining over a few pennies per gallon is going to save their burchmarts. Sheetz and Wawa have them beat, they have more pumps, it is much easier to get in and out, and their interiors are designed so well with so much to choose from. Ok, so Burch Oil gets out of the gas station business, Sheetz and Wawa will still compete against each other and if they slip up another competitor will show up and force them to work harder to keep their business. This has happened in nearly every retail industry, the below cost law is only slowing the inevitable.

 

[tipsymcgee]

Some of the Burchmarts clearly have to be hurting, but not all of them. The one in Hollywood and the Mechanicsville ones clearly are. What used to be a packed house now doesn't have a half-full parking lot in the a.m. But the Leonardtown one still does okay it seems, as does the big shop they have up on Berry Road. They are putting a new one in at Gallant Green road as well where they tore down the old Amoco station. But I can tell you that Burch Oil has an interest in the county because they've always been only here, but that doesn't mean they care more about the community than their bottom line. They have to advertise, Sheetz and WaWa really don't.

 

[righttobeararms]

Idunno if it makes a difference or not but I try to spend as much of my money as I can, at the Privately owned stores, no matter what they sell.
I try to go to locally owned Gas stations, Grocery stores, Hardware stores, Feed and Farm Supply, anything that there is a choice to spend my money locally rather that the "Big Box Stores" I spend locally when I can.

It really is in the best interest of the community to do this.

I have to be honest though. Walmart gets their share of my income, but mostly for things that it is just really hard to find else where.

 

[Fred Hoeck]

St. Mary's County made Rush Limbaugh Show

This price war was mentioned by Rush Limbaugh as he closed out his show today. Mentioned it as another slap my Maryland against busiiness similar to forcing Walmart to provide health insurance. The law targeted only Walmart.
When it comes to gasoline for a car, quality is important. What is the quality of the gasoline sold at Sheetz, WaWa, or B.J's. This used to be called "tank bottom". Now for Diesel, which I use, its all the same, but there is no price war. When I had gasoline car, I always bought name brand, and usually same brand, Shopped for cheapest price amongst the brands.

 

[gumbo]

I agree. I'm sure that BJ's and WaWa and Sheetz get better prices because they buy in bulk, while Burchmart has only seven locations. But if you don't count the Dash Ins (32 locations), Burchmart is still higher than many of the other locally owned stations.

MR. Burch owns more gas stations than you think

 

[Tonio]

MR. Burch owns more gas stations than you think

I think the Burch company also owns the Shell station across from San Souci, the Korner Karryout in Mechanicsville and the Shell/Subway in Charlotte Hall, but I don't know that for sure. If the company does, I wonder why these aren't branded as Burchmarts.

 

[Tomcat]

A typical pool rate for a MAJOR (100,000 gallons +) fueling station is in the dime range, which means about $10,000 in GROSS profit per month. Payroll will easily consume over half of that, given the number of hours that these places operate. The remainder won't pay for the real estate, taxes, electricity, insurance, etc, etc, etc.

Hmmmm....which would I rather do, sell gasoline for over $2.00 a gallon and make $0.10 or sell a cup of coffee for $1.29 and make $1.00 profit??? Wake up, they sell more than gas, that's what pays the bills.

 

[Larry Gude]

Why didn't you ask?

I gassed up at BJs during that time. They were out of Regular and in fact a truck pulled in to vacuum the tank dry. In return for the inconvenience, the operator of the BJ's gas station said, BJ's was selling 93 at the same price folks would have paid for 87.

It would be interesting to know how much these gas stations are actually paying per gallon of gas.

http://www.bloomberg.com/markets/commodities/energyprices.html

They're paying about 5-10 cents more per gallon.

 

[911Carrera]

I personally prefer to buy my gas at Burchmart locations over trying to fight to get in and out of the WaWa or Sheetz locations. The WaWa at the Route 4 and Route 235 intersection is tough to get in and out of.

Burchmart's food isn't too bad either. I buy my heating oil from Burch Oil, too.

They are a good company and I try to remain loyal to companies that treat me right as far as customer service goes too.

 

[Chasey_Lane]

I don't like to purchase gas from low-grade locations such as Sheetz, Wawa, etc. I prefer the quality of the more expensive, XOM locations instead. It really does make a difference in your vehicle's performance.

 

[ylexot]

I'm surprised nobody pointed this out...

"The sudden fluctuation in the Lexington Park area was the result of a little-noticed Maryland law that took effect in 2001. The General Assembly mandated that stations cannot charge less than what they pay for gas -- unless they're lowering prices to compete with a nearby station."

In the most recent incident, last Tuesday, a state investigator questioned operators of a BJ's, Sheetz and two Wawas about their $1.999-a-gallon prices after receiving a complaint from Burch Oil, officials said...................

Sounds like nearby stations competing...therefore, not illegal.