Gulf CEO: Consumers Are Spending Less in C-stores
FRAMINGHAM, Mass. -- Rising oil prices are forcing consumers to cut back on purchases at gasoline stations and convenience stores, Gulf Oil LP CEO Joseph Petrowski told CNBC. In an interview today with host Joe Kernan, Petrowski said both the number of fuel gallons and merchandise sold at Gulf is down as a result of the record February gas prices.
"We watch closely the 600 stores we own and operate," he said. "We're starting to see, like in 2008, some resistance."
His statement today backs up comments Petrowski made to Kernan on Jan. 3, when he said gas prices would not get lower than the then-current $3.20 price per regular gallon.
When consumers are buying products at c-stores, they are opting for private-label goods, the CEO noted. Although the economic situation is clearly not as dire as it was in 2008, at the height of the Great Recession, Petrowski did draw some parallels.
"[Fuel prices] can go a lot higher to what we saw in 2008, which was extraordinary," he said. "In 2008, we were selling eight gallons per pickup. Normally, it's 12. That's a real sign of distress."
The Gulf chief exec once again predicted that gas prices will only go up from here. He believes regular gasoline will reach the $4.50-per-gallon range in the eastern part of the United States, due to the shutdown of several refineries.
If gas prices continue to climb, c-store owners could be severely hurt, according to Petrowski, because getting people inside the c-store is much more important than selling gas.
"[L]egend has it they like to make money at the pump," said Petrowski. "The reality is they sometimes use gasoline as a loss leader to bring you inside the store."
One thing is different compared to other times in the past decade when gas prices were unusually high. Petrowski said heating oil demand is weaker than in the past due to a milder than normal winter and consumers driving fewer miles than they did just seven years ago.
There are more than 2,000 Gulf-branded gasoline retail centers in the United States.