The Sad Destruction of Flying J by Pilot- catering to cars

If fuel prices are so tight, why does walmart sell it for 20 cents a gallon less just 1/4 mile away.

 

20 cents on a 3.00/gal product comes out to barely 6.6% gross profit. Even if Wallyworld was keeping 20 cents and giving 20 away, that means a gross profit of 13%.
You can't run a business off of that kind of margin.
Fuel is the loss leader. Get you in the door to spend money on other things. Same for Walmart. You come for cheap fuel and end up shopping for all kinds of other stuff.
Station operators are at the mercy of the oil companies. They don't make money off the fuel. It doesn't even pay the overhead.

 

Wait a minute, hold on. What did I miss? I just came back from filling up after I spent too much money in the store...

 

Whatever.

But the Murphy station I used is not producing near the output that the big guys are. Murphy is making a couple cents per gallon, so that leaves the big guys making .23 cents more.

I have seen the books on several client stations. You will never get me to believe the sob story.

 

I hauled gas and fuel before and I knew what was in a gal as for the rack price transport and taxes and have to say MOST places markup the price 25cent to 70 cent a gal and as for truck stops I had a freind hauled to the flying hook in waddy Ky and they was close to 75cent a gal over all costs so when you take a gal of fuel at 3.00 a gal and do the math you see its all a money racket...It doesent matter as what a driver wants or needs things will never get any better than what it is today ...If we want a change then stand up and be heard but until then it will never change ....I would like to see things get better as I too hate being treated as a lowlife....As for most of what others think about the j's i never used I didnt care for getting a hood tore off and the low lite parking made for easy fuel thefts ..

 

Because they can afford to sell fuel at a loss if necessary, because it generates more traffic to the retail side, it's an amenity.

 

Hell the cheapest fuel in Abilene, TX is up on I-20. You get into town and prices JUMP about 10-15c.

 

This is an interesting thread. I'm a 4 wheeler but am very much a supporter of the American Trucker. I live near a Flying J in Ky and me and my wife were very excited when we saw a Denny's opening up where the Cookery once was. The Cookery when we moved out here had good food at good prices, however over the past year the prices went up and the food quality went down. So far we have ate at the Denny's twice, the first night it opened and a second time and thus far the service has been quick, food hot, and with the 2, 4, 6, 8 dollar menu very reasonable on price. Hopefully it remains that way over time.

From a business point of view some of the arguments here are valid. The markup on fuel is on avg about 8-10%. The margin though ends up being about 10cents per gallon after you takeout the credit card processing fees. Even though Pilot purchased Flying J doesn't mean they are in any stronger liquidity standing than Flying J was. Without reading the details of the deal my guess is it was financed with debt, which represents risk and a reason for some of the cost cutting changes that you may see at both truck stop brands.