You Know What Really Grinds My Gears? Now with 3x more gears...

[Fuzz]

Originally Posted by Dion

Costco sells at a lower price and they never seem to run out.

To counter your last point, stations profits go up when oil prices are rising rapidly like they are now. Sell at a higher price even though the shipment you paid for earlier was at a much cheaper price. Yet when the price of oil drops it's different situation where they would rather hold onto the extra profits and in the end slow to drop prices. Prices go up quickly and slow to drop.

Costco is not really like normal stations though. I suspect they have much larger tanks, and they make money in other ways. Using them as a basis to compare isn't really useful.

Yes, prices rise rapidly and I just explained why. You can read it again if you would like. They descend slower because no one wants to take a bath no that last purchase, so the station buying last in a dropping price environment ends up setting the price to not lose a ton of money. Other stations follow, because they don't want a run on their station. As those days roll forward and the highest price paid begins to drop, the prices drop.


So ya, customers pay the highest prices as they rise, and the highest as they drop(relative to bulk price) because of how markets, storage and purchase psychology works, not because of malicious gouging.

[Dion]

Originally Posted by Fuzz

Costco is not really like normal stations though. I suspect they have much larger tanks, and they make money in other ways. Using them as a basis to compare isn't really useful.

Yes, prices rise rapidly and I just explained why. You can read it again if you would like. They descend slower because no one wants to take a bath no that last purchase, so the station buying last in a dropping price environment ends up setting the price to not lose a ton of money. Other stations follow, because they don't want a run on their station. As those days roll forward and the highest price paid begins to drop, the prices drop.


So ya, customers pay the highest prices as they rise, and the highest as they drop(relative to bulk price) because of how markets, storage and purchase psychology works, not because of malicious gouging.

You have gas in your underground tanks you paid a certain price for. Should stations not wait until their next shipment before they raise their price. Problem is they don't and as a result they take an extra profit above and beyond what they would normally be making. Prices drop and as you say they have more expensive gas in their tanks. They don't want to sell at a loss as again you say. I would argue that the extra profits would cover any losses. That said, you're right it never works that way.

I would agree in hindsight the term gouging was extreme not appropriate.

[Jason14h]

Originally Posted by Dion

You have gas in your underground tanks you paid a certain price for. Should stations not wait until their next shipment before they raise their price. Problem is they don't and as a result they take an extra profit above and beyond what they would normally be making. Prices drop and as you say they have more expensive gas in their tanks. They don't want to sell at a loss as again you say. I would argue that the extra profits would cover any losses. That said, you're right it never works that way.

I would agree in hindsight the term gouging was extreme not appropriate.

This argument only holds up if every gas station fills their tank the exact same day

If not you still have competitive pricing as some stations would fill up their tank the day before a gas price jump and some the day after (assuming they don’t long term hedge buy / etc )

Or they collude on prices !

[Slava]

Well, the other argument is that they have so much fuel today, and replacing that fuel for them now will cost the new price.

[lazypucker]

Aren't the gas prices of major chains like Shell and Esso being dictated by head office? Isn't the head office remotely changes the price of the gas stations whenever and franchisees can't do anything about it?

[Dion]

Originally Posted by Jason14h

This argument only holds up if every gas station fills their tank the exact same day

If not you still have competitive pricing as some stations would fill up their tank the day before a gas price jump and some the day after (assuming they don’t long term hedge buy / etc )

Or they collude on prices !

Where is the competitive pricing in Calgary today? Everyone is about the same price.

[Jason14h]

Originally Posted by Dion

Where is the competitive pricing in Calgary today? Everyone is about the same price.

That’s my point - the cost of gas in the tank is irrelevant (usually)

[Fuzz]

Originally Posted by Dion

You have gas in your underground tanks you paid a certain price for. Should stations not wait until their next shipment before they raise their price. Problem is they don't and as a result they take an extra profit above and beyond what they would normally be making. Prices drop and as you say they have more expensive gas in their tanks. They don't want to sell at a loss as again you say. I would argue that the extra profits would cover any losses. That said, you're right it never works that way.

I would agree in hindsight the term gouging was extreme not appropriate.

Because of the reasons I already explained, it's not a 50/50. And it doesn't happen all that often. And the reality is, gas stations don't make much money from selling gas. No station manager is going out to buy a new boat because prices shot up. It's the $5/litre water, not the $1.50/litre gas that makes the real money.

[Jason14h]

Originally Posted by Fuzz

Because of the reasons I already explained, it's not a 50/50. And it doesn't happen all that often. And the reality is, gas stations don't make much money from selling gas. No station manager is going out to buy a new boat because prices shot up. It's the $5/litre water, not the $1.50/litre gas that makes the real money.

Lottery tickets and cigs !

[Dion]

Originally Posted by Fuzz

Because of the reasons I already explained, it's not a 50/50. And it doesn't happen all that often. And the reality is, gas stations don't make much money from selling gas. No station manager is going out to buy a new boat because prices shot up. It's the $5/litre water, not the $1.50/litre gas that makes the real money.

Sure they do. They don't just sell gas. Think of all the convenience items plus all those lottery tickets and cigarettes

[Fuzz]

Yes, sorry I didn't list all the items in the convenience store. Sometimes they have a car wash, too!


The point is, it's rare for a gas station to exist only as a gas station. And yes, I know. Costco makes money on their memberships, so they aren't just a gas bar either.

[lazypucker]

The only reason Costco has gas stations is to suck people into their stores to drop hundreds of dollars on useless sh*t.

[Dion]

Originally Posted by lazypucker

The only reason Costco has gas stations is to suck people into their stores to drop hundreds of dollars on useless sh*t.

A $1.50 hotdog and soda is the best thing going

[Erick Estrada]

Originally Posted by lazypucker

The only reason Costco has gas stations is to suck people into their stores to drop hundreds of dollars on useless sh*t.

Since the US/Iran war started the lineups at the Beacon Hell Costco have been comical. People are literally willing to wait 30+ minutes to save <$10 on gas.

[Dion]

Originally Posted by Erick Estrada

Since the US/Iran war started the lineups at the Beacon Hell Costco have been comical. People are literally willing to wait 30+ minutes to save <$10 on gas.

The one in Deerfoot Meadows is even worse.

[lazypucker]

Originally Posted by Erick Estrada

Since the US/Iran war started the lineups at the Beacon Hell Costco have been comical. People are literally willing to wait 30+ minutes to save <$10 on gas.

The far NW area is full of retired Asian people who have no problem waiting half an hour or longer because they can save $5 on gas.


They have all the time in the world to line up, but 5 bucks is 5 bucks!!

[PepsiFree]

$5 would be nice. I think the difference is closer to $20 for those of us with real vehicles.

[RichieRich]

Originally Posted by lazypucker

The only reason Costco has gas stations is to suck people into their stores to drop hundreds of dollars on useless sh*t.

Between the gas and the hot dogs Costco hardly makes anything... these are their "loss leaders" and margin isn't a huge driver for them. Besides, Costco has DAILY gas deliveries due to their huge volumes whereas the individual franchise stations may be 3-5+ days between deliveries.

[Sliver]

Originally Posted by RichieRich

Looking for: decent/low priced wings in NW; non breaded.
None of this buck-a-wing rip-off stuff.

Moose's hot wings are awesome. A few times a year I'll grace the NW with my presence just for those.

I also really like Top's dill pickle wings. I order them extra crispy because I like my wings jerky-ified.

[GioforPM]

Originally Posted by Dion

A $1.50 hotdog and soda is the best thing going

One day we said "why don't we buy a pack of those hot dogs and buns and do 'em ourselves". Turned out to be way more per hot dog just for the dogs than their counter price, let alone the buns.