Lower prices, higher sales, more profit at the gas pump
“You can trust your car to the man who wears the star,” promise those familiar Texaco ads hailing the supposed virtues of the crisply uniformed gas station attendant. Yet more and more these days, American motorists find that pulling into a gas station can be a lonely experience—no smiling greeting, no wipe of the windshield, all too often not even an attendant. Sometimes indeed the station itself has disappeared, its facilities closed up entirely or transformed into animal hospitals, used-car lots or fruit stands.
The full-service station, long a familiar and comforting fixture of the American roadside, is falling victim to a major new marketing trend. For years the large oil companies, which own or lease most stations, were not concerned about income from gasoline sales; their earnings came mainly from producing and selling crude oil. But those profits have been slashed by takeovers of production facilities by governments abroad and price controls in the U.S.
Seeking higher profits per pump, Texaco, Exxon, Mobil and other oil giants have been closing down at a dizzying clip what they consider marginal stations. Nationwide, the number of stations has dropped from 226,000 in 1973 to 180,000 at present, and virtually no new full-service stations are being built. Instead, the trend is to no-service stations that sell only gas and oil, require customers to fill ‘er up themselves, and can be operated by a single cashier.
Because costs are lower, these stations can chip 4¢ to 5¢ off the price of a gallon of gas (current nationwide average: 63¢ per gal.), attract more customers and sell more fuel. Almost half of all the stations in the nation are now self-service, v. only 8% three years ago.
Because gas consumption continues to climb and the number of stations has fallen sharply, the amount of gas pumped by the average station has more than doubled since the early 1970s, to about 33,000 gal. per month. The self-service stations typically pump much more —200,000 gal. per month and up.
The new economics of gas sales has spurred competition for the big companies from regional chains that go by such names as Raceway (Alabama), Maverick (Colorado) and Fas Gas (Texas). What gasoline men describe as “the Taj Mahal of the self-service” is also an independent: a place in Las Vegas called Terrible Herbst that features 48 pumps, all run by a staff of two. The stations of the future, some oilmen say, may be somewhat like those run by an outfit in Brussels called Nafta, where a motorist punches his credit card number into a computer, then fills up his tank from an overhead nozzle. The computer then charges the amount of the customer’s purchase to his bank account.
To combat these fast-growing upstarts, the big oil firms are experimenting with a variety of customer come-ons. Tenneco stations in the South have opened convenience stores that sell such things as beer and sandwiches. To entice shutterbugs, some Shell stations have installed Fotomat shops next to their pumps. The majors have also started selling private-label gas brands that are not expensively advertised and can be sold at rock-bottom prices. Mobil, for example, has introduced Big Bi and Hi Val gas in some areas. This practice has often put the majors in direct competition with their own stations.
Indeed, the big loser in the great gas station shake-up has been the small businessman who leases his station from a large firm and depends on it to provide fuel and marketing support. Often these operators make most of their money from car repairs or maintenance, and do not want to switch to selling gas exclusively. Yet, if they refuse to go along, the companies can and sometimes do refuse to renew their lease.
In Massachusetts, California, Maryland, Pennsylvania and other states, these operators have succeeded in getting laws passed to protect them from being arbitrarily closed by the oil companies. In addition, Congress is now considering legislation that would curb the oil companies’ freedom to end leases. Such measures will ensure the survival of a fair percentage of full-service stations. To help fill the need created by the demise of many others, a new type of business is springing up: auto service centers that sell no gas but concentrate instead on providing auto repairs and parts. For example, Sears, Roebuck and J.C. Penney both operate a string of such centers nationwide. Yet hard realities cannot be denied. Like the Mom and Pop grocery store, the gas dealer who will check the oil, tune a motor or tow a car will almost certainly be ever rarer in the years ahead.
More Must-Reads from TIME
- L.A. Fires Show Reality of 1.5°C of Warming
- How Canada Fell Out of Love With Trudeau
- Trump Is Treating the Globe Like a Monopoly Board
- Bad Bunny On Heartbreak and New Album
- 10 Boundaries Therapists Want You to Set in the New Year
- The Motivational Trick That Makes You Exercise Harder
- Nicole Kidman Is a Pure Pleasure to Watch in Babygirl
- Column: Jimmy Carter’s Global Legacy Was Moral Clarity
Contact us at letters@time.com