Speedway, 1/31/08

Marathon came out with its fourth-quarter and yearend earnings report today. I looked through the numbers to find out what was going on at Speedway.

As noted in an earlier post, Speedway stores make more money on the merchandise inside the store than they do from the gasoline they sell. Gasoline is the hook to get customers inside the store. Here are numbers from the fourth quarter:

Profits from sales of gasoline and other petroleum distillates: $95 million.
Sales from general merchandise: $172 million.

Merchandise carries a profit of about 25 percent. The percentage profit on gasoline isn't nearly that much, otherwise we'd be paying about $1.45 a gallon ($1 for the gasoline plus 45 cents in taxes).

So gripe about gasoline prices all you want. It's not the gasoline that convenience stores are making money on. It's the candy, the cola and the beer.