Self-Serve Fueling Marks 50 Years

ALEXANDRIA, Va. -- Self-serve fueling is marking its golden anniversary as the first self-service gas pump turns 50 on Tuesday.

It is hard to believe there was a time when motorists stayed in their cars as an attendant pumped their gas -- of course, if you live in New Jersey or Oregon, you are still staying put. However, store operator John Roscoe changed all that when he flipped a switch at his convenience store in Westminster, Colo., to activate the first U.S. remote-access, self-service gasoline pumps.

On that first day, June 10, 1964, Roscoe's store sold a little more than $36 worth of gas --124 gallons to be exact -- but selling fuel would never be the same from that point on, according to NACS, the Association for Convenience & Fuel Retailing.

Furthermore, the convenience store industry would never be the same as c-stores began adding fuel without having to add attendants. Today, convenience stores sell 80 percent of the fuel purchased in the United States. 

"What made self-serve so important to the convenience store industry was that we already had the facility," said Roscoe, who now lives in Fairfield, Calif. "By spending $10,000, we effectively got the gasoline business from full-serve gas stations without their labor expenses. If you could sell 1,000 gallons of gasoline with a 10-cents-a-gallon margin, you could double your margin without adding much to your expenses."

In the 1960s, gas margins were much like other retail margins, and it was common to have 10-cent margins with gas priced between 20 cents and 30 cents per gallon. Today, gross margins on gasoline are approximately 18 cents per gallon, but expenses are much greater. After expenses, including credit card fees, pretax net margins on gas are approximately 3 cents per gallon, according to NACS.

As far back as the 1930s, some stores allowed customers to pump their own gas with an attendant resetting the pump and collecting the money. However, Roscoe's location was the first that allowed true self-serve as Americans have come to know it.

"This innovation not only changed fueling, but the concept of self-serve that we know today," said Jeff Lenard, vice president of strategic industry initiatives for NACS. "Because it was so unique, it took a good decade to truly catch on, but once it did, convenience stores quickly became the country's dominant fueling stations, and other modern conveniences like to-go coffee, self-serve fountain soda and ATMs soon followed."

According to NACS, state fire codes prohibited self-serve fueling in most of the country back in 1964. Over time, restrictions began to ease, opening the door for self-service dispensers in 48 states. New Jersey and Oregon, as well as a few scattered municipalities across the country, still prohibit customers from pumping their own gas.

Despite the change in state laws, acceptance within the convenience store industry was slow. To encourage others to jump on the self-serve bandwagon, Roscoe offered to speak about his success on a panel called "New Concepts of Merchandising for Profit" at the 1964 NACS Annual Meeting.

"I was with a person on the panel who operated a meat market in Oregon. After the presentations, all of the questions from the floor were directed to the meat market operator. Gasoline sparked no one's interest," Roscoe recalled.

While the panel presentation did not grab store operators' attention, Roscoe's fuel sales did. He quickly added self-serve fueling to additional sites and saw his sales grow.

Now that convenience stores could sell unbranded gasoline from self-service pumps cheaper than branded, full-service stations could, customers flocked to convenience stores for their fill-ups, according to NACS.

"The public is always interested in lower prices and immediately went for self-service gasoline," Roscoe said.

With gasoline typically selling for 20 cents per gallon 50 years ago, a discount of 2 cents per gallon translated into a 10-percent savings.