The reasons are simple:
- Two of the stations are across the street from each other and are along my daily commute route
- The third station is where I actually go for my gas and is the catalyst for price adjustments by the other two gas stations
- Sutter Hill is at least 30 miles from the nearly metropolitan area and gasoline prices are generally unaffected by the lower prices in the "big city"
- Shell (corner of Ridge Road & Hwy 49)
- Chevron (corner of Ridge Road & Hwy 49)
- Safeway (corner of Industrial Blvd & Hwy 49)
Then last week, I noticed something was amiss. The Chevron was charging $2.85 while the Shell was charging $2.71, a spread of 14 cents. These two stations had always priced their gasoline in lock-step with each other, but not last week. The assumption here was that Safeway had also raised their prices and there was some delay in raising the prices at the Shell station. I was wrong. Safeway was priced at $2.51.
This week, Chevron is at $2.87, Shell at $2.85, and Safeway at $2.55.
Have the established gas stations given up the price fight against Safeway? Or is Safeway able to uncut the competition given it's deep corporate pockets? I believe it's a combination of both. Over the weekend, I noticed the average price of gasoline in the Valley was in the $2.60 range. So not only is Safeway undercutting the Sutter Hill competitors, but also undercutting the average price in Valley.
I, for one, will continue to purchase my gasoline at Safeway especially with the 3 cent per gallon discount for using my Club Card. I will also begin tracking the gas prices for these 3 stations.
2 comments:
This is a complicated subject, but to simplify a bit, the Shell and the Chevron stations are privately owned "branded" stations. The Safeway is part of a large system of "unbranded" stations.
The Safeway has several advantages over the branded stations on the corner:
One, they can buy on the open market. Whoever has the lowest price on the wholesale market is who gets Safeways' business. The Cheveron dealer on the corner has to buy Chevron fuel, whatever the cost. Sometimes it's low, sometimes it's high.
Two, Safeway has volume sales. Each site has the advantage of one-stop shopping, a large number of pumps, and location that all contribute to high site-on-site sales.
We could talk on and on and on about this, but I'm sleepy. See you at the EN!
-jbjbj
I would tend to agree, but will submit these observations and bits of information for you to digest.
The word on the street (meaning I can no longer cite the reference to this information) is that most of the gas stations in Sacramento (branded or not) buy their fuel from the same place. They buy their gasoline from a wholesaler in Sacramento. I actually know where this place is, it's SW of the I-5 and I-80 interchange. Tankers from various gas companies, Chevron being one of them, all fill their trucks here. The only difference is that the Chevron fueler adds the proprietary "Techron" during the fueling process.
There have even been reports of generic tankers going to an Arco gas station to fill an order and then dropping the rest of the order off across the street at a Shell.
If it wasn't for the fact that gas prices in Amador County as consistently 20-30 cents higher than the Sac Valley, I would agree with you. In the whole scheme of things, Amador County is only 30-40 miles from the gasoline wholesaler. That 30-40 miles is the equivalent to the furthest reaches of the Sac Valley and even those gas stations are 20-30 cents lower.
Unless... these branded stations are buying their gas from their respective seller in Stockton at a higher price?
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