Oil Companies Make Their Gas Stations Act Like Grocery Stores, No Wonder They Are Having A Tough Time Competing With Real Grocery Stores

PORT WASHINGTON, N.Y.--Aug. 1, 2002-- High volume retailers (HVRs), like mass merchandisers, supermarkets and warehouse clubs, are gaining consumer patronage over traditional "branded" gasoline stations, according to the latest information from The NPD Automotive Products Group. For the first six months of 2002, The Motor Fuels Index, which surveys over 200,000 gasoline purchasers annually, indicates that 63 percent of all consumers report "price" as the main reason for choosing a brand of gasoline. In comparison, 95 percent of HVR gasoline customers say price was the main reason for their brand choice. This shift in consumer behavior corresponds to the volatile retail gasoline pricing that began in February of 1999 when the average price was around $1.00 per gallon and peaked in May of 2001 when gasoline averaged $1.80 per gallon.

Since 1998, the overall gasoline market share of HVRs has increased from less than one percent to 5.5 percent for January through June, 2002. For the first half of this year, big-box retailers in five states have rung up more than 10 percent of those states' gasoline sales. In Texas, home to most of the major oil companies, HVRs accounted for 14.1 percent of gasoline sales, while in Washington State they had 13.9 percent of sales, Arkansas 11.4 percent, Tennessee 11.1 percent, and Kentucky 10.2 percent. In San Diego, Costco is now the third largest gasoline retailer behind Arco and Chevron. Sam's Club has 7.7 percent of the market in Memphis and is the third largest gasoline retailer in that metropolitan area. HVRs hold 14 percent of the gasoline market in Houston. These are all areas with vehicle-dependent populations.

"Unlike the traditional gasoline service station whose profit margin is gasoline dependent, HVRs can operate at much lower retail prices. By taking advantage of consumer demands for lower priced gasoline, HVRs can drive tremendous traffic volume to their sites. In fact, it's not uncommon for HVRs to sell 500,000 to one million gallons per month as opposed to the average retail gasoline facility that may sell 100,000 gallons in the same period," said David Portalatin, spokesperson for the NPD Automotive Products Group.

About the NPD Automotive Products Group

The NPD Automotive Products Group provides marketplace information to the automotive products industry and the motor fuels/C-store industry. Products and services for the U.S. include Aftermarket Industry Monitor, and three consumer-based information services including Car Care Trac(SM), Motor Fuels Index and Convenience Store Monitor. In Canada, NPD provides Auto Trac®, a consumer-based tracking service for automotive products and services.

About The NPD Group, Inc.

The NPD Group is an innovative global market information company that leading manufacturers, retailers, resellers, distributors and operators turn to for essential market information across a broad range of industries. As the gold standard for measuring product movement and consumer behavior in each industry tracked, NPD offers unparalleled information for better business decisions. Clients use this business-critical insight to uncover market opportunities, to strengthen channel relationships and to benchmark industry performance.

Markets tracked by NPD include apparel, automotive products, consumer

Editors Note: This sounds like a DUH to me...the oil companies are acting like grocery stores so why shouldnt the grocery stores act like gas stations? hey are better equipted to work on thin margins and they give the counsumer more choice.v