Gas Price War in New Mexico

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Gas Price War in New Mexico

CLOVIS, N.M. -- As convenience stores selling gas all over the United States continue to struggle with gas margins and competitive pricing issues, Town and Country Food Stores and Allsups Convenience Stores took the pricing war to a new -- lower -- level at two stores in Clovis, New Mexico.

"Several weeks ago, the Allsups store lowered its price by three cents a gallon, and since Town and Country Food Stores' unwritten promise is that we will stay competitive in the all of the neighborhoods we operate, if a competitor lowers its prices, then we will match them," Dan McCurdy, director of communication told CSNews Online.

And so the battle began. Each time a price was lowered, it was matched -- until Allsups lowered its price to 49 cents a gallon. "We finally stopped at 99 cents," said McCurdy, "and then it bounced back up a bit, and finally the fire marshal came around and put an end to it."

The lower pricing attracted people from all over -- many Texas residents crossed the border to take advantage of the prices, McCurdy told CSNews Online. "Lines were going as much as a mile in length up and down the street," he said. "Some people stayed in line for 30 minutes and up to an hour and a half."

The fire marshal informed the companies they were violating a number of codes with the lines, and finally put an end to the several weeks of war.

"The fire marshal explained if there was an emergency, they wouldn't even be able to access the stores or the people in the cars," explained McCurdy. "He yelled uncle for both of us."

While no other store in either company became involved, "it was crazy, for a while in Clovis," said McCurdy. "At one point we were selling gas at $2.29 a gallon, and when you look at wholesale and other costs for us, it is $2.90 cents a gallon. And we certainly were not making that up in volume."

Overall, the low pricing did not hurt the company or the store, said McCurdy, since they only make about five cents a gallon otherwise. But, "it was a frustrating thing for us," he noted. "However, we were glad that a lot of our customers benefited from it. In order to maintain our image of being competitive, we looked at it as an investment. Of course, it was painful investment -- a little pain at the pump -- but it was just one store," he said.

The Town and Country store is back up to $2.89 a gallon, although McCurdy said he heard a rumor Allsups dropped its price by three cents a gallon. "I'm sure we matched them," he said. "Hopefully, it doesn't start all over again."