While soaring gasoline prices are hitting consumers hard in the wallet, the prices of milk, bread and coffee are not increasing.
It?s not that transportation costs are not affecting the wholesale costs of the items, but gas stations and convenience stores are simply not passing the increases on, said Jeff Lenard, a spokesman for the National Association of Convenience Stores, a Washington-based association representing retailers.
“There are about 1,060 convenience stores in Maryland selling gas, and the competition is so fierce that they will absorb increased costs on store items rather than raise their prices,” Lenard said.
That?s because convenience stores make more money by selling a cup of coffee than they do by selling a tank of gasoline, Lenard added.
“Convenience-store owners dislike high prices as much as consumers,” he said.
When gas prices rise, more consumers charge their fuel purchases instead of paying cash. This also cuts margins, Lenard said.
The shrinking margins triggered by higher energy costs are forcing some convenience stores to shut their doors, while others are surviving by diversifying into more profitable niches. “You see many convenience operators adding sub shops and gourmet coffee to their stores,” Lenard said.
Peter Horrigan, president of the Mid-Atlantic Petroleum Distributors? Association, also said gasoline stations selling other consumer goods are keeping the prices of milk and bread low.
He added that while consumers often vent their anger over gas hikes to his members, their ire is misdirected. “Our members are at the bottom of the pyramid,” he said.
