Mike's trip to the gas station
I bought gas the other day at a local station/convenience mart where I'm a regular, and as I'm often prone to do, I started up a conversation with Rez, the owner, who is often there in the mornings.
Now, I make it a point not to mention gas prices to him directly, because everybody does and I know he's heard it enough. (It's not the station owner's fault, by the way. The prices on the sign are set by the oil company and if the station owner changes them, they lose their franchise. So be nice.)
Anyhow, I noticed Rez staring out the little half window underneath the cigarettes when I came in, elbows resting on an open accounts book. So, I said "hey, is everything alright," and we started talking.
Apparently, his receipts were way, way up, but his profits were way, way down. People are spending all their money on gas which is low profit for the stations, but, because of the gas cost, people weren't buying that extra candybar or soda or laser pointer or any of the other crap he's got spread around his store. From the sound of it, he's in real trouble.
I don't have any sense of how broad it is, but I've run across a lot of empirical evidence that Rez isn't alone. As I pulled out, I found myself wondering how many other small businesses are suffering because of gas prices. I'm not really talking about direct costs like more expensive gas for deliveries, I'm talking about market decisions made by people foregoing their small luxuries in order to save that little extra money to put in their tank.
Manicurists, piano lessons, my favorite Chinese restaurant. I just wonder how much Exxon's record profits are really costing us.
(I did end up buying a soda. It's still sitting in my fridge unopened.)
Now, I make it a point not to mention gas prices to him directly, because everybody does and I know he's heard it enough. (It's not the station owner's fault, by the way. The prices on the sign are set by the oil company and if the station owner changes them, they lose their franchise. So be nice.)
Anyhow, I noticed Rez staring out the little half window underneath the cigarettes when I came in, elbows resting on an open accounts book. So, I said "hey, is everything alright," and we started talking.
Apparently, his receipts were way, way up, but his profits were way, way down. People are spending all their money on gas which is low profit for the stations, but, because of the gas cost, people weren't buying that extra candybar or soda or laser pointer or any of the other crap he's got spread around his store. From the sound of it, he's in real trouble.
I don't have any sense of how broad it is, but I've run across a lot of empirical evidence that Rez isn't alone. As I pulled out, I found myself wondering how many other small businesses are suffering because of gas prices. I'm not really talking about direct costs like more expensive gas for deliveries, I'm talking about market decisions made by people foregoing their small luxuries in order to save that little extra money to put in their tank.
Manicurists, piano lessons, my favorite Chinese restaurant. I just wonder how much Exxon's record profits are really costing us.
(I did end up buying a soda. It's still sitting in my fridge unopened.)
posted by mikevotes at
12:28 PM
10 Comments:
Very interesting.
By
Bravo 2-1, at 1:33 PM
I'm spending my money slightly differently and I only buy gas every two weeks or so. It's only $30-40/month extra for me, but that money has to come from somewhere.
Mike
By
mikevotes, at 2:48 PM
Mike... great little post (as usual).
It's these little things, like peoples small-ticket buying decisions, that can have a surprising impact on our economy. These sort of things are not measured by Washington economists and Rez's insights are not part of the formula we use to measure economic goodness. Exxon posts record profits, speculators pocket more money, and more college educated people are hired by service industries and the pundits say "Look how wonderful everything is."
Like a virus, these little consumer decisions will eat away at our national economic foundation until the house of cards known as the Bush economic plan comes crashing down. It might start with Rez, but it will end with AT&T, Exxon, and CitiBank.... This economic ship is WAY too top heavy, and unless the next congress does something to right the imbalance... who knows.
Ask yourself this: what if every American with credit card debt just said "f-you" to Visa and MasterCard? How hard would that shake the parasitic foundations of the banking industry, hmm?
but now i'm just ranting... :)
By
-epm, at 3:45 PM
That's a funny thought that you ended with. What would they do with $50 million customers.
And, this sort of small economy thinking is also why I'm against tax cuts for the rich trickle down economics. When the Bush administration mailed out those "tax rebate" checks(remember that gimmick?) the middle class and poor put that money immediately into the economy whereas the few wealthy people I know just threw it on the pile.(I asked.)
Beyond the whole better world argument of helping the poor and middle classes up, economic policies that do this have a more direct and more grass roots stimulation on the economy. Money passed to the middle class quickly goes from hand to hand to hand benefitting the economy more.
That's my rant.
Mike
By
mikevotes, at 4:22 PM
Work has been slow for me all week as people are now packing a lunch rather than buy one from us. But hey< at least we got Bin Laden, er, I mean, at least we got Zarqawi, er, well, at least we got Saddam!
By
Lew Scannon, at 5:17 PM
That's exactly what I'm talking about. And the money that you were making is now going to Exxon/Chevron/Shell.
I don't think it's huge amounts, just a thousand little cuts.
Mike
By
mikevotes, at 5:30 PM
Terrific post.
By
JUSIPER, at 2:38 AM
What Im starting to notice is that higher gas prices do not affect consumer confidence and spending, it just shifts the spending away from the little guys and towards companies like Exxon et. al.
So the economists say, "consumer confidence and spending remains strong", and, "the economy is growing" but what that means is consumers are spending on gas, and oil companies are growing.
By
Praguetwin, at 3:58 AM
Praguetwin, that's exactly my point.
Mike
By
mikevotes, at 9:13 AM
I just caught this post and its great.
I'm in the same boat as your friend Rez, I own a small station with 4 pumps and we are taking beating.
To top things off, the city let a no name discount gas company out of Canada build a station 30 feet from me and they are selling gas at cost to try to drive me out.
I admire your loyalty to Rez, I wish my customers of 10 years were like you. They sold me out for 2 cents a gallon.
By
Anonymous, at 10:17 AM
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