Gas Stations Go Unbranded

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Gas Stations Go Unbranded

Consumers are not the only ones looking for the cheapest gas price around. According to a report by the Asbury Park Press, an increasing number of stations are dropping major oil companies to look for cheaper gas elsewhere.

Only 10 percent of stations were unbranded ten years ago. Now, 25 percent of gas stations are unbranded, according to the New Jersey Gasoline Retailers Association.

One reason for the switch is that unbranded gas stations can buy their gas based on price rather than be forced to accept gasoline from a major oil company that has higher prices.

In years past branding was not an issue because of proprietary credit cards and promotional and advertising incentives, reported the Asbury Park Press. As prices reach $3 a gallon "Brand loyalty is out the window. People buy because of cost," William Dressler, executive director of the New Jersey Gasoline Retailers Association told the Asbury Park Press.

Price is an ever-increasing factor in gasoline branding as well. Dressler told the Asbury Park Press, "The name of the game is price. If I can't make money with a major brand, I'm going elsewhere."

And that is what many are doing. Jack Pontoriero, independent c-store operator in Dover Township, N.J., recently switched to unbranded gas to put himself on a "level playing field" with the other independent gas stations lining the highway, he told the Asbury Park Press.

Independent c-store chain Wawa has had success with unbranded gasoline by keeping prices low while drawing customers into the store to make more profits. The result is more than 400,000 gallons being pumped by a Wawa location each month compared to 80,000 gallons for an average station, according to Tom Kloza, chief oil analyst for the Oil Price Information Service.

"If you operate a service station and you see a 'Soon to come – Wawa' sign while you are driving down the road, you pretty much want to swerve into the other lane [of oncoming traffic]," he told the Asbury Park Press.

During the summer months where the price difference between branded and unbranded gas become slim, profits for being unbranded diminish. Pontoriero told the Asbury Park Press that early this year "was my worst four or five month experience in the business. We were selling it for within two cents of what we were paying for it."

As a result, some c-store chains are reverting back to branded gasoline.

C-Store chain Plaid Pantry once was unbranded, but now hangs 76 and Shell banners at its gas stations. The reason to switch was high volume retailers in the area were taking away any profit from unbranded gas, leaving it higher than the major oil company's product. A full story on Plaid Pantry's branded gas can be found in the July 17 issue of Convenience Store News.