US braces for rising interest rates 2:32 New York (CNNBusiness) — Americans are cutting back on spending at the gas station, and it’s not just the amount of fuel they put in their tanks: they’re also changing the how they fill their bags with food and other essentials. The trigger: rising inflation. The average price of gasoline hovers around $5 a gallon, having recently surpassed that mark for the first time in history. Households are paying much more for gasoline at the same time that inflation has also made food purchases more expensive. Gas station convenience stores are often an ideal substitute for grocery stores when all you need is water, a couple of bags of chips, a carton of milk, or a last-minute coffee on the way home from the worked. This impulse buying behavior is a good barometer of the consumer’s health at any given time. According to ARKO, consumers visit gas stations more frequently and buy less gasoline per visit. They are also shopping less frequently at company-operated convenience stores. “The price of gas and everything else is much higher, but people have to drive,” said Arie Kotler, president and CEO of convenience store operator Arko Corp. “They’re still going to the gas station, but they’re recalculating how much Kotler has observed purchasing patterns at ARKO-operated gas stations and convenience stores. The company operates nearly 1,400 convenience stores, most with gas stations, in small towns and rural communities in 28 states. observed two trends in visits to gas stations: “Compared to the same time last year, people go to gas stations more often, but instead of filling the tank full, they fill a half or a quarter at a time,” “They’re driving less and shorter distances.” At the same time, consumers shop less frequently at the gas station store. “But when they come to the store, they’re putting their purchases together,” he said. Instead of buying just one or two items, they’re making a larger purchase, maybe for the whole week.” Bigger bags of chips, lots of frozen pizza and $0.99 coffee Now that consumers are even more focused on getting the best value for their money, Kotler said ARKO is recalibrating its offerings, services and promotions to try to keep prices low. low prices and high sales. “In the past, it was just one drink and a small bag of chips,” he said. “Now they buy for the value. For example, a larger bag of chips for $4.59, instead of a small bag for $2.29. They can get a couple of servings.” Similarly, with beverages, he said two-liter bottles are outperforming smaller sizes, as are 12- and 15-pack beverage cans. ARKO also added self-service coffee machines that sell hot and iced coffee for $0.99. Cheap coffee, grab-and-go sandwiches and frozen pizzas are also big sellers among budget shoppers. And since the beginning of the year, Kotler said, ARKO has added fully automated bean machines in more than 500 stores. “These machines are self-service and eliminate the cost of labor. So we can sell hot and iced coffee for $0.99,” he said. The company has also invested in more takeout coolers at more than 600 locations, where shoppers can purchase sandwiches and frozen foods such as pizza, hamburgers and other frozen entrees. “Our peanut butter and jelly sandwich is $1.29 and our ham and cheese sandwich is $3.99,” said Michael Bloom, the company’s director of marketing. “We have prices similar to grocery stores, but maybe $1 to $3 less.” Pizza is often one of the most purchased items at gas stations. “A lot of people can’t afford to go out to a restaurant right now. Our $5.69-$9.59 family frozen pizzas are a very popular item right now,” Kotler said. He also said stores are offering deals like “buy two, get one free” and discounts on gas when customers sign up for the company’s loyalty program.”All of these savings add up for consumers,” Kotler said.”Every few months we try to reinvent our stores to stay competitive, stay in business and remain relevant to shoppers in this environment.”
Welcome! Log into your account
Recover your password
A password will be e-mailed to you.