What is the impact of "big box" stores on the community?

These Big Box stores have now moved into the retail gasoline market.  Gasoline is sold at significantly lower prices as a loss leader in many of these Big Box stores in order to attract customers to their properties.  Because national chain stores can buy gasoline in enormous volume, they are able to price their gasoline sometimes far below the local gas station or convenience store next door.

No other product is advertised like gasoline.  The price is listed in big, bold letters on an outdoor sign for all consumers and competitors - to see.  A 2008 National Association of Convenience Stores (NACS) study found that Consumer concerns over high gas prices have significantly changed how customers shop for gasoline.  Today, nearly three-quarters of all consumers say that price is the main factor in selecting where they purchase gas.  This is a dramatic shift from just a few years ago.  A 2000 NACS consumer survey found that location was the main factor for consumers in selecting where they shop for gasoline. And in 2007, 66 percent of consumers said that price was the main factor.  Today, price is more important than location by nearly a 5 to 1 margin.  The average fill-up is in the 10  to nearly 12 gallon range, NACS estimates, meaning that consumers say they will significantly change their purchasing behavior to save roughly 10 cents on a $30 to $35 fill-up (based on gasoline prices at approximately $3 per gallon in late January 2008).

Profit margins on gasoline for OMEGA members are very slim.  Additionally, the average profit on grocery items and foodstuffs are minimal.  Consequently, independent retailers have to sell a large volume of product to come out ahead. While more and more Big Box stores are offering gasoline, West Virginians need to realize that this undermines the local and state economy.  If the Big Box stores are successful, they will drive the local gasoline station or convenience store owner out of business, similar to how they've hurt the independent grocery stores.

To learn more about the threat of Big Box stores hurting the local economy or if you would like someone to speak on this issue, please contact us at (304) 343-5500.