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    Rising Gas Price Force Ultimatums

    Independent c-store operators need more cash sales to stay in business.

    RICHMOND, Va. -- With crude oil trading well over a $100 a barrel, average prices at the pump steadily inch toward the feared $4 dollar mark leaving some c-store operators in bind.

    "A lot of people are pondering their futures," Michael J. O'Connor, president of the Virginia Petroleum, Convenience and Grocery Association told The News Virginian. "If this situation continues much beyond 2008, you're going to see contractions within the industry."

    O'Connor told The News Virginian that the problem is tied, in part, to the overwhelming ratio of customers relying on plastic rather than cash. "Gas station owners must pay 3 percent of the cost of gas every time someone fills up using a credit card," said O'Connor. "Eighty percent of customers now pay with a credit or debit card," he added.

    To combat this trend, gas station owners are selling fuel at or below cost, which combined with slowing fuel sales, severely impacts independent stations who can't count on corporate backing.

    Jeff Lenard, a spokesman for the National Association of Convenience Stores, told The News Virginian that retailers are looking toward selling sandwiches and coffee as a way to make money. "Convenience stores really have to change how they operate or get out with higher gas prices, because the day of being able to stay in business on selling gas [doesn't] exist anymore."

    According to O'Connor, the only way for many independent stations to stay in business is by drawing customers into stores to buy food and drinks, a tactic he conceded will be difficult as the vast majority of customers pay by credit at the pump and go.

    "The inside of the store is becoming the only place where a lot of these folks are making money," O'Connor told The News Virginian.

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