PITTSBURGH -- Motivated by rising fuel costs, Brian C. Weiss, owner of four convenience stores in Pittsburgh, has taken the lead in forming a cooperative for c-store owners--the Weiss Enterprises Retailers' Wholesale Co-operative Network--that could enable members to collectively negotiate lower prices on merchandise, reported The Pittsburgh Post-Gazette.
The co-op is being formed for owners of c-stores that purchase at least $100,000 of candy, groceries, cigarettes and tobacco items annually. Weiss said about 15 or 16 stores are ready to join. "We would [image-nocss] like to see every small business within a 100-mile radius of Pittsburgh" become a member, he said.
"Over the past five years, we've been noticing how things have been getting really, really pricey," he told the newspaper. "Fuel charges that used to be a couple of dollars are now $9 or $10."
Fuel charges are levied by wholesalers and distributors to offset the fuel costs incurred when making deliveries. "Fuel drives everything," Weiss said. "Because the cost of fuel is so high, the price of everything goes up."
Besides obtaining uniform discounts for members, Weiss said he hoped it would achieve the reduction or elimination of fuel charges. If several members in a given area receive their merchandise from a wholesaler on the same day, they could share a single fuel charge, "instead of paying $10 per location, maybe paying $1.50 or $2."
A visit to a Sam's Club confirmed the need for the co-op when Weiss saw a certain brand of iced tea selling for 24 cans for about $11. "I'm paying right now, from a vendor, around $14.95 for a case," he said. "I'm going to end up buying it at Sam's Club."
If he did, he would not be alone, Jeff Lenard, spokesperson for the National Association of Convenience Stores (NACS), told the paper. "We have heard from retailers on occasion saying that they can get a better deal buying from one of the warehouse clubs than they can from their distributor," he said.
Some 70% of c-stores are owned by companies or individuals who own no more than 10 stores, Lenard added. And the higher prices often charged at those stores, he said, are not because the owners are trying to make a killing on products. "The reality is they don't have the better deal" when buying, he said. "Co-op programs can help you be more competitive."
Weiss, 40, has a lifetime of experience to draw upon in creating the co-op, said the report. He grew up helping his father, Eddie Weiss, in the family business, which operates Smithfield News and Universal News, Downtown and Gus Miller's and University News and Gifts in Oakland. The younger Weiss purchased Weiss Enterprises in 2000.
Buying groups similar to Weiss? planned co-op have changed over time, said the report, citing NACS, moving from an initial focus on negotiating contracts with distributors to becoming "retail service companies" that assist their members with such functions as merchandising and data analysis.
According to the report, citing the new co-op's website, www.weissenterprises-coop.com, long-term goals for the group include negotiating discounts on health care and providing retirement investment plans. Weiss said he expected such additional benefits to develop over the next three to five years.
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