Safeway Gets Into Gas Business


Chances are, even the most frugal shoppers among us would not travel too far out of our way for a savings of three cents.

There is, however, one product for which almost all consumers will happily break that rule of thumb: gasoline.

Such as the gasoline at Safeway's new gas station where those who possess a Safeway Club card receive a three- to six-cent discount on gas that, before the discount, already equals the lowest price in town.

"I come for the discount," said Mike Vickers, a Chandler resident with a cabin in Pine. "I didn't even know it was six cents today, so that's like an extra bonus. Any time you can save a little on gas, it's a good thing. I used to go to a station down the main drag, but now I just come here."

Wally Martin of Payson usually buys his gas wherever it's most convenient.

"But whenever I hear they have the six-cent discount, I head straight over," he said. "It's not a lot, but every penny counts."

"Our customers like our prices a lot," said Kim Kallmann, an attendant at the station, which opened June 26. "They also like the fact that the gas prices around town are going down because of it."

Since many of the gas grocers regularly undercut local retail gas prices in order to draw customers, their proliferation is regarded as a disconcerting development by many convenience-store food-and-gas retailers across the country.

But not all.

"It hasn't really hurt my sales at all," said Dale Strothmann, manager of Circle K North, who emphasized that he is speaking for himself, not the Circle K Corporation.

"The grocery stores are using gasoline as a loss leader to get more people into their stores. That's all they're doing. They don't mind if they lose money selling gas, because they actually make all the money in the grocery store. That's why they can always be the lowest price in town. They are not in the gas business to make money."

The arrival of Safeway's gas station didn't surprise Strothmann at all, he said. What surprised him was that Payson's Wal-Mart Supercenter did not include a gasoline station when it opened on the Beeline Highway.

"But more (grocery/discount store) gas stations will more than likely come to town," Strothmann said. "Everybody constantly wants another piece of the pie here in Payson."

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