Out of Gas
Did Rite-Aid kill Buddy's?
by Sally Mitani
From the March, 2010 issue
Two prominent Marathon stations, Buddy's Mini Mart at Packard and Platt and Washtenaw Mini Mart in front of Arborland, closed last fall. Is there something going on with Marathon? Or is this just the recession taking its ugly toll on gas stations as it's taking its toll on everything else?
Jeff Lenard, spokesman for the National Association of Convenience Stores (NACS), provides some perspective.
"In 1997 there were 5,447 fueling outlets in Michigan. By 2009 that had gone to 4,828. What happened? It's just harder to make money selling gas."
Gas, Lenard says, is sold at a markup of about 15 cents per gallon--and if customers pay with plastic, 6 cents per gallon goes to the credit card company. Raising prices is not an option: "If you're a convenience store, you have to have pretty close to the cheapest gas, because we know that people will do extraordinary things to save three cents a gallon."
Like, for instance, drive all the way to Sam's Club. "Sam's Club doesn't have to make money selling gas to continue to sell gas," Lenard says. "You'll go there to get what you think is a good price on gas, and while you're there, you'll say, 'Hey, I drove ten miles out of my way. I might as well buy $100 worth of groceries.'"
The bottom line is that gas alone won't keep a business going: "If you're not selling coffee, or sandwiches, you're probably not destined for the long term," says Lenard. But now that side of the business is also hurting: how much string cheese and Red Bull can a store sell when every other corner in town is selling them? "If you go to Best Buy, say, or PetSmart, they all look like convenience stores at the register," Lenard points out. "Here's a statistic for you: twenty-two percent of furniture stores sell sweet and salty snacks at the register."
Washtenaw Mini Mart, according to city tax records, was foreclosed and sold at sheriff's auction
in October 2008 but remained opened until last fall. An employee of adjacent Cold Stone Creamery says "they had a security problem. They kept getting robbed. They had no lights out there." And is it really such a good location? One Cold Stone employee says yes, but another says it had visibility problems--people would shoot past it before they noticed it was there.
Buddy's Mini Mart, according to city records, hadn't paid property taxes since 2007. Richard Sakstrup, owner of Sakstrup's Towing two doors down, says he knew the business was troubled. A few old-timers at Banfield's who keep up with the neighborhood say the same thing. There's a gas station and convenience store on the opposite corner and another just west. Will Banfield opines that the Rite Aid that recently opened on the southwest corner of Packard and Platt might have put the final nail in the coffin.
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[Originally published in March, 2010.]