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JACKSONVILLE, Fla. -- Lewis Petroleum Co. is taking the high road, shunning sales of alcohol, lottery tickets and girlie magazines in favor of a family-friendly atmosphere at its Jacksonville Beach and Mandarin, Fla. locations.
To that end, the company recently debuted a new layout that features screens at gas pumps showing nature scenes, according to the Jacksonville Business Journal. Those screens soon will include superimposed messages encouraging positive character traits, such as integrity, honesty and responsibility. "We'll probably lose some customers that don't mix too well with what we're doing," president Harry Lewis said. "We'll take the chips where they fall."
Alcoholic beverages were the third-biggest sellers in convenience stores nationwide throughout 2002 and beer sales carried a 21 percent profit margin, according to the 2003 Convenience Store News Industry Report. Lottery tickets and adult magazines are less risky losses. Lottery tickets offer only a 5 percent profit margin and adult magazines averaged a mere $503 in sales per convenience store last year.
"I don't know that he's taking a big risk at all," said Jim Smith, president of the Florida Petroleum Marketers and Convenience Store Association in Tallahassee. Current trends have made the profitability of alcohol, tobacco and lottery ticket sales "depressed beyond belief."
Lottery's 5-percent profit margin "means for every dollar ticket you sell, you make a nickel," Smith said. "It may take your clerk 20 minutes to help your customer figure out what he wants to do with his dollar. That nickel isn't going to pay for that 20 minutes."
Larger retailers that sell alcohol, such as Jacksonville-based Winn-Dixie Stores Inc., have higher purchasing power, which means small convenience stores must reduce prices to compete, thus pouring out profits. "Adult magazines are not a big factor in our industry," said Jeff Lenard, a spokesman for the National Association of Convenience Stores (NACS). "There are a significant number of chains that don't offer them."
Adult magazines also are common targets for shoplifters, added Smith who ran a chain of convenience stores. Plus, "there is a perception both by the operators of the facilities as well as the public as a whole that a convenience store is not the place for that. If you want something like that, you go to one of those places with the neon X's out front," Lenard said.
Lewis, whose wholesale petroleum company has operated in Jacksonville for 29 years, has a game plan to cover any potential risk. A revamped layout of pumps makes driving in and out quicker and easier and "allows us to handle a far greater volume of customers."
Lewis also took what some might consider a risky move, splitting from petroleum giant Exxon six months ago to create his Lewis Petroleum Expressway brand. The split means Lewis loses the benefit of a well-known name, but allows him to charge customers less. Branded gasoline typically costs 3 cents to 5 cents more a gallon. Lewis' only actual risk, Smith speculates, is that big petroleum executives will poke a little water-cooler fun at him. "I admire the living daylights out of him for having the strength of his convictions to do it."