Gas Up, Profits Down

Beef jerky sales are down in Gilroy.
Gilroyans aren’t just bemoaning the high price of gas, they’re
actually buying less of it. And when gas sales slump, so do sales
of beer, jerky, individually wrapped roses and countless other
impulse items stocked in gas station convenience stores.
Gilroy – Beef jerky sales are down in Gilroy.

Gilroyans aren’t just bemoaning the high price of gas, they’re actually buying less of it. And when gas sales slump, so do sales of beer, jerky, individually wrapped roses and countless other impulse items stocked in gas station convenience stores.

“My inside sales are off a lot,” said Channi Singh, manager of the Chevron station at 10th Street and Monterey Road. “People’s wages are the same and there’s no extra money to spend.”

Sundry sales at Singh’s Chevron station were down nearly 30 percent in September, and he’s selling about 500 fewer gallons of gas each day than he was before gas hit the $3-a-gallon mark. Some of the slump is seasonal, but Singh thinks its mostly sticker shock.

“It’s only the gas price,” he said. “When it goes down, volume will go up.”

There is no denying the very real effect gas prices are having on Gilroy consumers. Early evidence indicates that mass transit ridership is up. There were 167 cars in Gilroy’s Caltrain parking lot on the average day in September, compared to 144 in August.

And when it comes to vehicle sales, anecdotal sales figures in Gilroy mirror national trends. Nationwide sales of GMC trucks are down 30 percent. Gilroy Chevrolet Cadillac Sales Manager Rick Romero said Wednesday that September truck sales were off 20 percent from a year ago.

Romero said part of the slide is due to the end of the company’s popular employee discount incentive. But the end of that promotion dovetailed with an unprecedented spike in gas prices, and in Gilroy and across the country, U.S. automakers are suffering more than their Japanese counterparts Honda and Toyota, which make the most popular gas and electric hybrid models and are known for offering fuel efficient models in general.

“A GM buyer is not after a hybrid, the bulk of our business is trucks,” Romero said. “We’re fortunate that we’re in an area with money and people aren’t as affected as much,” Romero said. “People spending forty or fifty thousand don’t worry as much when gas is $3 a gallon.”

But for most people looking for a new car, fuel economy is a must, and demand for the perpetually back-ordered hybrid Prius is growing by the week at Gilroy Toyota.

“We’re getting several calls a day about the Prius,” Sales Manager David Aguillon said. “I would say we’ve had a vast increase in people interested in the Prius and the hybrid Highlander. People are trying to buys cars that I don’t even have VIN numbers for yet.”

The wait for the basic model Prius, and its promised 50 miles to the gallon, is at least a month. The waiting list for the hybrid Civic at Gilroy Honda is three or four months. Honda Sales Manager Mark Baines said the cars are hard to keep in stock because the demand is limited to California.

“This is a California commodity,” Baines said. “These cars don’t sell in the Florida to Texas region.”

The biggest sellers at Gilroy Honda continue to be Civics and Accords, which get between 30 and 40 miles to the gallon.

“Those are bread and butter, month in, month out,” Baines said. “People are always going to buy what they want to buy when they want to buy it.”

Chrysler is the one U.S. car maker that had a strong September, with a 26 percent jump in car sales. Lem Hymes, general manager of South County Chrysler Dodge, said his customers are looking almost exclusively for fuel-efficient models and snapping up Dodge Neons and new 300c series, which offer luxury and decent mileage at about 25 miles a gallon.

“More and more, people are conscious of gas mileage,” Hymes said. “But even under the fuel crunch we’re still selling SUVs.”

That’s also true at Bob Lynch Ford, where sales have been steady and trucks are the fastest moving items for a company that saw a 20 percent dip in national sales in September.

Sales Manager Ron Ridgeway said Ford’s $30,000 hybrid sport utility vehicle, which get about 36 miles per gallon haven’t sold nearly as well as Ford’s 20 mile-per-gallon line of pickup trucks, which also sell for about $30,000.

“The majority of the people still buy what they want to buy,” he said. “In 1974 when the price of gas tripled people ran out and bought small cars like Pintos and Vegas, but then six or seven months later the crisis was over.”

Fast Facts

Gallons of gas sold a day at

the Monterey and 10th Chevron:

August: 3,500

September: 3,000

Sundry sales:

August: $28,000

September: $20,000

Wait for a basic model Toyota Prius: One month

Wait for a Honda Civic hybrid: Three or four months

Difference in highway gas mileage between Honda Civic and its hybrid: About 5 miles per gallon

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