This text is taken from our newsletter “Le Courrier de l’économie” of May 23, 2022. To subscribe, click here.
Contrary to what one might think, the rise in gas prices — now over $2 a liter — is not benefiting service stations that much. The retail margin varies by region, but is generally not very high.
For example, last Friday, in the southwest of Montreal, it represented 7% of the total price paid at the pump, according to the Régie de l’énergie du Québec. The minimum acquisition cost, meanwhile, was about two-thirds of the price.
So how do stations make money? According to a study conducted by the National Association of Convenience Stores in the United States (NACS) in 2019, approximately two-thirds of gas station profits come from in-store sales.
About 44% of customers who come to fill up at a gas station walk into the store, according to NACS, and many of them are tempted by the sight of chips, soft drinks and other treats. Rather, that is where the windfall is for retailers.
In Quebec, more than 80% of service stations are paired with a convenience store or a business, according to the Régie.
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