The reason why gas stations started to diversify into convenient stores is because gasoline sales were no longer profitable for sustaining these small businesses. Even convenient stores needed to franchise and solidify into bigger and fewer players because economy-of-scale was the only economic factor to sustain profitability.
All told, convenient store chains use gasoline sales as an in-demand product used to draw travelers to buy other more profitable products. Ever wonder why milk is about a dollar or two more than found in a large grocery chain store? Gasoline sales by themselves cannot sustain a business selling only gasoline.
^^This is very true^^
My uncle just recently explained this to me it's also why convenient stores can charge so much for the items they sell for smaller portions.
The reason why gas stations started to diversify into convenient stores is because gasoline sales were no longer profitable for sustaining these small businesses. Even convenient stores needed to franchise and solidify into bigger and fewer players because economy-of-scale was the only economic factor to sustain profitability.
All told, convenient store chains use gasoline sales as an in-demand product used to draw travelers to buy other more profitable products. Ever wonder why milk is about a dollar or two more than found in a large grocery chain store? Gasoline sales by themselves cannot sustain a business selling only gasoline.
^^This is very true^^ My uncle just recently explained this to me it's also why convenient stores can charge so much for the items they sell for smaller portions.