Retailers Baffled by Pennsylvania Ruling
MT. PLEASANT, Pa. -- A not-so-pleasant ruling by the city council that requires fuel operators to have an attendant on duty within 12 feet of the gas pumps will likely lead to gas station closures as retailers in city are already struggling with poor margins and neighboring competition, CSNews Online has learned.
The measure ties the hands of retailers who are counting on fuel volume to make up for poor margins throughout the convenience store. According to Ned Franks, president of Graft Oil Co. and a strong opponent of the law, retailers are losing their ability to compete with stores in neighboring towns. He told CSNews Online he would continue to oppose the measure.
"The law was enacted for safety reasons, but its basic premise strips hard-working businessmen of their ability to compete effectively in a difficult market, said Franks, a 20-store chain operator that already had to close one store because of the ruling.
A major reason why the bill was passed was to help Mt. Pleasant's elderly community, which accounts for some 60 percent of the population. Since the measure was first introduced last year, Franks has collected more than 200 signatures from fuel customers who disagree with ordinance. "This [law] also ultimately hurts local customers because they are being penalized with higher fuel prices when the shop at gas stations close to home," he said.
"If the elderly community is concerned about safety, they would make their fuel purchases at a store that offers full-service. That allows retailers who want to offer full-service fill an important niche and retailers that want to compete on price satisfy another important segment of the market," Franks said.
As a result of the new law, Franks shut down his Sunoco store because the volume there was not heavy enough to compete with convenience stores operating on the neighboring sides of Mt. Pleasant's borders. He has yet make a determination in what to do with the Honey Bear Citgo, but he is not optimistic that he will be able to keep the fuel offering operable.
"Due to the current economic climate we are going to have to raise prices to cover additional labor costs," Franks said. "With the current strain on margins and profitability, we are not in a position to operate fuel as a loss leader. If the volume and the return on our offering is diminished to a point where it is not profitable, we'll have to shut it down."
Franks doubts Mt. Pleasant officials have studied the long-term impact that would have on the city. "Politicians have an agenda, but they are driving small businesses away. They are doing the people of Mt. Pleasant a terrible disservice by driving away good, hardworking businesses and the revenue th6ey generate for the city."
ABOVE: Ned Franks, president of Graft Oil Co.
The measure ties the hands of retailers who are counting on fuel volume to make up for poor margins throughout the convenience store. According to Ned Franks, president of Graft Oil Co. and a strong opponent of the law, retailers are losing their ability to compete with stores in neighboring towns. He told CSNews Online he would continue to oppose the measure.
"The law was enacted for safety reasons, but its basic premise strips hard-working businessmen of their ability to compete effectively in a difficult market, said Franks, a 20-store chain operator that already had to close one store because of the ruling.
A major reason why the bill was passed was to help Mt. Pleasant's elderly community, which accounts for some 60 percent of the population. Since the measure was first introduced last year, Franks has collected more than 200 signatures from fuel customers who disagree with ordinance. "This [law] also ultimately hurts local customers because they are being penalized with higher fuel prices when the shop at gas stations close to home," he said.
"If the elderly community is concerned about safety, they would make their fuel purchases at a store that offers full-service. That allows retailers who want to offer full-service fill an important niche and retailers that want to compete on price satisfy another important segment of the market," Franks said.
As a result of the new law, Franks shut down his Sunoco store because the volume there was not heavy enough to compete with convenience stores operating on the neighboring sides of Mt. Pleasant's borders. He has yet make a determination in what to do with the Honey Bear Citgo, but he is not optimistic that he will be able to keep the fuel offering operable.
"Due to the current economic climate we are going to have to raise prices to cover additional labor costs," Franks said. "With the current strain on margins and profitability, we are not in a position to operate fuel as a loss leader. If the volume and the return on our offering is diminished to a point where it is not profitable, we'll have to shut it down."
Franks doubts Mt. Pleasant officials have studied the long-term impact that would have on the city. "Politicians have an agenda, but they are driving small businesses away. They are doing the people of Mt. Pleasant a terrible disservice by driving away good, hardworking businesses and the revenue th6ey generate for the city."
ABOVE: Ned Franks, president of Graft Oil Co.