One Iowa convenience store manager says small profit margins keep them from making a lot of money as gas prices continue going up. Adam Smith is the manager of eight “Guppy’s on the Go” stores in Iowa. Smith says store fees for customers who swipe a credit card at the pump keep margins low.
Smith says just one station could run up $15,000 a month in credit card fees, “and that’s a huge expense to us.” Smith says the credit card fee is based on the amount of the bill. “And as prices go up…that three percent that business is paying, obviously that number grows as well. So that’s correct to say that right now we are experiencing any real margin in the gas,” Smith says.
Smith says profits usually come from in-store food and merchandise purchases. But he says those sales are down as higher gas prices have most customers leaving their wallets in the car.
A gallon of gas in Iowa costs on average $3.97. That’s up from $3.50 a gallon in January. Katherine Fought with the Iowa Office of Energy Independence says the increased gas price is related to the price of crude oil which makes up almost 70% of the cost. She says the market for crude oil is so unstable that it’s difficult to predict how much gas will cost.
“Lately they have been all over the board in terms of movement up and down on a daily basis,” Fought says, “But if we see sustained downward trends with crude oil prices that will eventually translate to lower gasoline retail prices.” Gas prices normally rise during summer months because of an increase in demand. But Fought says the increase may be less significant because the U.S. has a greater gasoline inventory than originally expected.
Fought and Smith made their comments on the Iowa Public Radio program, “The Exchange”.