[Editor's Note: This story kicks off a new weekly feature in CSP Daily News, in which we will highlight the issues surrounding high gasoline prices and their effect on the industry now and into the prime vacation period of the summer months. Watch for the Fuel Price Focus logo on CSP Daily News every Monday.]
BOONVILLE, Mo. -- Marlon Schweighauser has an unusual benchmark for measuring his gas station's performance. The Shell-branded In & Out Convenience Store of which he is general manager sits at the entryway to the Isle of Capri Casino. When the [image-nocss] casino's parking lot is overflowing, it's a good time to be a fuel marketer in Boonville, Mo., which lies about 30 miles west of Columbia off the I-70 corridor.
Lately, however, fewer cars seem to be filling the casino's lot, which Schweighauser attributes to consumers having less disposable incomethereby traveling less frequentlyas a result of surging gasoline prices.
The casino's just not as busy, Schweighauser told CSP Daily News. It's getting ready to open a 147-room hotel, so we're hoping that will send a little more business our way. We're at $2.65 a gallon, and a month ago we were a little higher. We were growing our [gallon] volume for a while, then when the hurricanes hit last year it seemed [consumers] backed off branded and went to unbranded.
In & Out principals have been working to boost volume and attract more business by maintaining an impeccably clean store and providing best-in-class service rather than by dropping prices. The strategy seems to be reaping dividends; inside sales continue to feed off a growing base of 1,100 to 1,200 customers that shop the In & Out every day.
But even as store volume increases, market forcescompetition from strong regional marketers QuikTrip and Pilot, driveoffs and ridiculously high credit-card fees among themare making it tougher to shore up the bottom line at the pump.
There is no profit in gas unless you catch everything just right, Schweighauser said. But that's every day business, and that's the way this business has been running for years and years. An actual concern I have is when we do take a big hit, like 15 cents a gallon. When that happens and you order a tanker-load, that's another $1,270 we have to pass on to the consumer that we have to try to get back.
Missouri drivers have had it better than most. The average retail gas price in Missouri last week hovered between $2.60 and $2.65 per gallon, dropping from the late April high of $2.77, according to GasBuddy.com. Nationwide, a gallon of gasoline averaged $2.89 per gallon late last week, with California topping Lower 48 states at $3.32 a gallon.
I don't think people realize how lucky they are to be here, Schweighauser said of the Show-Me State. Missouri has the lowest road taxbut that means we also have some of the worst roads in the union. Basically, right now consumers are educating us. They're telling us, We're not going to be on the road as much.' They're telling us they're going to stay right here and not travel.
But because it's more of a neighborhood store than a travel store, as Schweighauser characterized it, the 5,400-square-foot In & Out may ultimately benefit from consumers sticking close to home. The store pumps about 75,000 gallons a month, a number Schweighauser expects to grow when and if fuel prices embark on a considerable decline. It also does well above the industry average from an in-store sales perspective.
Ultimately, In & Out's greatest relief may come as a result of investments made by its next-door neighbor, the Isle of Capri Casino. The casino's five-year plan includes opening the 147-room hotel this year, followed by the construction of a parking garage and the doubling of the facility's floor space to accommodate more gamblers.
The casino has been a wonderful neighbor, said Schweighauser. The last numbers I saw, the casino employs 679 people, and those 679 people drive or walk by here to get to work every day. [The casino has] brought a lot of people in the door.
Because of the symbiotic relationship In & Out shares with the casino, the store should see an increase in floor traffic, too. Schweighauser is crossing his fingers that gallonsand, more importantly, improved fuel profitswill follow.
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