Mon, Nov 09 2009
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Published July 08, 2008 12:33 pm - Bill Wininger knows many of his customers think he’s swimming in gasoline profits. A hard sale Retailers face tough decisions as their costs continue to rise By RONNIE ELLIS CNHI News Service GLASGOW — Bill Wininger knows many of his customers think he’s swimming in gasoline profits. He’d say it’s more akin to drowning in rising expenses.
As gas prices at the pump follow escalating crude oil prices, Wininger — who owns six Traveler’s Plaza Food Markets in Barren, Metcalfe and Monroe counties — is making less money, not more. “We’ve actually made less profit the past two years,” Wininger, 65, said. “We make more when gasoline and crude goes down because the street price doesn’t go down as fast. Through April of this year, gross profit on gasoline and diesel at all product levels was only 7.2 cents.” But it’s hard to explain to his customers. “The complaints have actually slowed up some,” he said. “But by the same token, people get angry when gas goes up 20 cents every day.” Adding to the problem is the hidden fuel costs added to nearly every non-fuel item his stores stock and sell. “Everything is up. A lot of wholesalers even have added fuel surcharges for delivery,” Wininger said. He either must pass that along to his customers or eat the loss. He’s doing some of both, trying to balance his own expenses and profit calculations with what customers will tolerate. He’s already seen some drop-off in gas sales. “It’s not significant yet, but we can see the downward trend,” Wininger said. Laura Goins, director of communications and organization of the 6,000-member Kentucky Retail Federation, said retailers are hit by gas prices from all sides. Like Wininger, most are reluctant to raise prices too quickly because they know their customers are already cutting back on purchases. The minimum wage went up 70 cents on July 1 and retailers are paying much more for delivery and shipping of goods and products. And it’s not just the little guy who’s hurting, she said. “Our members range from the local dry cleaner and local groceries to the large, chain department stores,” she said. “It’s not just the small retailers who are hurting. It’s across the board.” Gas prices have gone up so fast and far, according to Goins, that some older pumps won’t calculate prices at more than $3.999 a gallon. Gov. Steve Beshear declared an emergency which allows those retailers to calculate prices manually if the cost exceeds $4 a gallon. That’s the case at a small country store, the 1297 Market on Ky. highway 1297 at Railton near the Barren County-Warren County line. Laura Rediess, 27, whose father, Edward Patrick, owns the store, said in mid-June they were selling gas at $3.99. “That’s as high as our pumps will go,” Rediess said. “If gas goes over that — well, when it goes over that — we’ll have to put up a sign and add it up inside the store.” Most of her customers are neighbors and friends who live in the small farm community about 14 miles from Glasgow. That makes it even tougher to pass rising costs along. 
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