RaceTrac executives look back at the tumultuous year in gasoline with calm heads
ATLANTA -- Despite a year that saw street prices soar past $4 per gallon for unleaded, executives at one of the nation's leading gasoline-discount chains, RaceTrac Petroleum Inc., are taking the year in stride, telling CSP Daily News that history has dealt swifter blows and that the venerable convenience chain was prepared for the ups and downs of 2008.
In an exclusive interview, Carl Bolch Jr., chairman and CEO of RaceTrac, Atlanta, said withstanding the brunt of this year's volatility meant riding out the rise in fuel prices that occurred this past spring. "The real pressure for any [image-nocss] retailer is when gas prices increase, because it leads to pressure on margins," Bolch said. "It's a matter of trying to respond quickly and in the right manner, keeping up with the margins you'd like to have without losing business."
The nearly 75-year-old RaceTrac chain operates 225 petroleum-retail and c-store sites while its sister network of RaceWay locations consists of 250 sites run by independent operators. The stations are scattered through the Southeast, with RaceTrac stores in major metropolitan areas such as Dallas/Fort Worth, Atlanta, New Orleans and Orlando, Fla.
Regarding price increases this year, Bolch said that, beyond passing the $4-per-gallon threshold on the street, the only unusual element was uncertainty as to what caused the increase. "When Saddam [Hussein] invaded Kuwait [in 1990], it was clear. But that wasn't so [this year]."[Still,] we prepare for volatility. It's nothing new. In fact, with [Hurricane] Katrina three years ago and when Hussein attacked Kuwait, those were much faster and higher price spikes. This year's spike was not as severe."
Max Lenker, president of RaceTrac, concurred. "Pushing the $4 barrier was no different than pushing the $3, $2 and, dare I say without dating myself, the 50-cent barrier," he said. "What you see with barriers is that people always overcompensate on the doom and gloom side."
Looking back, Lenker said he felt the price of crude went too high in 2008 and expected it to drop sooner, only to see it increase month after month. But for RaceTrac, it was business as usual, with the exception of the physical task of making sure the company could post the number 4. "Some of our price signs are older and didn't have the flexibility."
For more in-depth coverage of RaceTrac, watch for the October issue of CSP magazine.