WESTMINSTER — The first remote-access self-service gasoline pump was put into operation here fifty years ago, revolutionizing the way gasoline was sold and jump-starting the convenience store business nationwide.

John Roscoe, now of Fairfield CA., told the National Association of Convenience Stores that his first sale on June 10 1964 was for only one gallon. For the whole day his sales only amounted to 124 gallons, earning a grand total of $36.

Today convenience stores account for 80 percent of the gasoline sold in the United States.

Convenience stores were not doing much business back in 1964 when Roscoe decided to try increasing his profit by experimenting with remote access. Self-service wasn't a new concept at that time. Even in the 1930s, people could pump their own gasoline at some locations but an attendant had to stand by to reset the pump and collect the money.

State fire codes in many parts of the country prohibited self-service. But the government gradually had relaxed those restrictions.

What remote access meant for the convenience store industry was for a $10,000 investment owners could abandon full-service, drastically reducing their labor costs and increasing the gross margin which had been about ten cents for gasoline priced at 20 to 30 cents.

Roscoe quickly introduced the pumps to other locations and saw his profits soar, but it took about a decade before it caught on with other store owners. He told the NACS when he spoke on a panel about his success he drew little interest from convenience store owners.

But drivers liked the concept because stores could sell them unbranded gasoline from self-service pumps cheaper than the fuel the branded full-service stations offered. Usually it meant a two-cent savings on a gallon of gasoline and a quicker transaction because there was no wait for the attendant.

Once convenience stores jumped on the bandwagon, businesses that sold only gasoline were on their way out. Pressured to add convenience stores, many gasoline stations opted to stop selling gasoline and concentrated on repair work.

But many others became convenience stores and, as the years went by, they added more and more products to their shelves and even installed ATMs to attract customers.

For a while the industry rode high. The gross margin increased to eighteen cents, but then came competition from grocers and large discount stores. The overhead also increased in a way it had not existed in the 1960s. Along with more taxes, the owners had to start accepting credit cards and the fees have hit the industry hard. Today, according to the NACS, the pre-tax net margins are about three cents a gallon.

RIFLE — One of the last non-automated convenience stores in the state was forced to change to self-service remote access at the end of June.

The switch to fully automated gasoline pumps and car wash meant six employees were laid off at the Corner Store owned by Swallow Oil Co. Worse times for the company may lie ahead.

The change came because of increased competition. A City Market fuel station opened in April, selling cheaper unbranded gasoline. It is able to do so because of a loophole in the law that allows use of grocery revenue to keep prices much lower than at convenience stores. The smaller operators can't compete.

Sales volume at the Corner Store dropped 30 to 40 percent said owner Kirk Swallow.

At first, convenience stores and gasoline stations dropped their prices twenty cents a gallon to compete but they couldn't main that low level.

Swallow thinks branded gasoline is better for cars but drivers are not convinced. So he put the store up for rent or sale six months ago. He doubts he will have a taker. By making the switch to automation it will save him $10,000 in labor costs and give him time to prepare for the environmental cleanup he is required to do if he shuts down the store.

Swallow Oil operates several convenience stores in Parachute and Rifle and supplies stores from Silt to Aspen with gasoline. The company has a bulk plant in West Rifle and provides snow plowing for businesses such as restaurants and banks and for residential customers.

Swallow is now seeing people driving extra miles from other areas to save on gasoline at the City Market.

Kirk Swallow predicts this is just the start. Within a year he thinks Walmart will add pumps and other City Markets will get on the gravy train.

"I've already cut back on the hours we can afford to pay people," he said.

Swallow Oil has supplied oil and gasoline to the region since 1951 and employed up to 50 people before the gas station at the City Market opened.

COLORADO SPRINGS — The state's Attorney General continued his crackdown on convenience stores that sell "spice," a form of synthetic marijuana that has been blamed for one teenager's death and is suspected in two other deaths and scores of emergency room visits.

Attorney General John Suthers sued the POPO Wee Mart and its owners, Jin Ju Kim and her husband Wanhee Lee, asking for $2,000 for each violation alleged in the complaint and release of all profits from the sales.

It is the fourth such lawsuit Suthers has brought against a convenience store in the last few months. Other stores sued are in Aurora, Longmont, and Denver. In Littleton, which passed an ordinance making the sale illegal, a convenience store operator was arrested. None of the big chains are involved.

The action in Colorado Springs occurred after two raids on the establishment. The first occurred in December when detectives conducted three undercover purchases. At that time 1,505 packages of spice products, sold under names like "Herbal Incense," "Botanical Sachet" and "Potpourri," were confiscated.

Officers explained to the owners that the sale of such products was illegal and harmful but, "despite this explanation, despite the substantial presence of law enforcement in the store in December, and despite the removal of all the products, when they returned in February officers found evidence the sales were intentional," Suthers said. At that time he said they found more spice in the store and some underneath a spare tire in the trunk of a vehicle the store owners possessed.

One death sparked a lawsuit from the parents of a teenager who died after ingesting spice. That and two other deaths are under investigation. In addition, 221 emergency room visits were linked to synthetic marijuana use.

Suthers said synthetic marijuana appeals to teenagers who think it is harmless because of the way it is marketed. But it is "extremely dangerous." It can cause elevated blood pressure, seizures, hallucinations, paranoia and vomiting, Suthers said.

"We will continue to prosecute retailers selling it," he said.

EVERGREEN — A convenience store is getting rid of its gasoline pumps and storage tanks in the wake of revelations that there likely had been multiple spills or overfills and possible leaking fuel lines for years.

Store manager Tash Guzman said the cleared area will be turned into a parking lot and she hopes a craft market and farmer's market will come in.

The state Department of Labor and Employment division of Oil and Public Safety issued a report on conditions at the property in May. The state found evidence of contamination of shallow ground water and soil in direct contact with the pumps and storage tanks, but no pollutants in the nearby creek across the highway.

The store started addressing the problem in 2010 and stopped using the pumps in the spring of 2013, according to property owner Roger Guzman.

Tash Guzman said she grew up working and hanging out at the store and she said she wants it to be the community gathering place it used to be.

COLORADO SPRINGS — Kum & Go opened its tenth store in this city in May.

The operators of the 5,000 square-foot store celebrated by selling pizza slices for a dollar.

Kum & Go also added a new app for iPhone and Android users to receive exclusive digital offers and find the nearest store to redeem them. It allows fast and easy redemption of digital coupons from a mobile phone by having the coupons on screen barcode-scanned at the register.

Kum & Go's newest stores are designed to save energy and water. The chain currently has 71 stores that are LEED (Leadership in Energy and Environmental Design)-certified.

There are now 53 Kum & Go stores in Colorado.

COLORADO SPRINGS — Police are investigating a confusing scenario involving a stabbing with a machete at a downtown 7-Eleven.

Called to the store at 1:40 A.M., officers found a man with a machete and promptly arrested him. After seeing a large wound on the top of his head they determined he was the victim.

It is being investigated as an attempted murder.

FORT COLLINS — The City Council has given initial approval to setting a 10 cent fee on disposable shopping bags that convenience stores and other retail establishments would be required to charge their customers.

The merchants would get to keep all the money but must spend at least fifty percent on reusable bags to distribute to customers.

If passed formally, Fort Collins will join other city governments in imposing the fees in an attempt to decrease the number of plastic bags in landfills.

And it has led to a decrease. Boulder has seen a 68 percent drop in plastic bag use after instituting a fee. Breckenridge has seen a 40 to 50 percent reduction.

Originally published in the August 2014 issue of the O&A Marketing News.
Copyright 2014 by KAL Publications Inc.