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Coin Machine Review (& Pacific ...)

Issue: 1948 May

Gas Stations as Locations
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A TRADE STUDY -
In its monthly reports on retail trade
over the country, the U. S. Department of
Commerce calls them filling stations. In
its booklet for veterans, on how to get into
the business, the Department calls them
service stations. In THE REVIEW Chart of
T ,ocations they are called gas stations.
A government report says the gas station
has advanced in 25 years from chiefly an
adjunct to some other business to be a re-
tail business in its own name. Modern sta-
tions are becoming more and more impor-
tant as outlets for a variety of merchandise
and services.
Gas stations have been recognized as ac-
ceptable locations for several types of coin ·
machines for a number of years, depending
on the space and a number of other fac-
tors. They are not the most important type
of location for machines but they are in-
creasing in favor as the modernization trend
spreads in the station field.
In a check of a group of REVIEW read-
ers, one operator who had only music ma-
chines reported having a few gas stations
as locations. Due to the fact that operators
sometimes class motels, drive-ins and high-
way eating places that sell gas, as gas sta-
tions, it is not easy to make an accurate
check on this point.
Among a group of operators who have
both music and amusement machines, 55
per cent had some machines in gas stations.
Among the total number of locations of all
types reported by the group, gas stations
made up about 10 per cent of the total.
Among a group of operators who had vend-
ing machines only, 60 per cent of them re-
ported having some machines in gas sta-
tions. Among all the types of locations re-
ported by this group, gas stations made up
about 6.3 per cent of the total.
The vending machine operators' surveyed
included only one large firm, the rest being
individual operators of candy, cigarette and
bulk vendors. Some of the most conspicu-
ous expansions into the gas station field
have been made by large operating firms.
On a numerical basis in the United
States, gas stations rank fourth among the
35 or more types of locations generally
known to the coin machine trade. In nu-
merical order, the locations rank as, 1.
Apartment buildings, 2. Grocery stores, 3.
Restaurants, and 4. Gas stations. In these
four types of locations there are some so
very small that they cannot be considered
as profitable for coin machines of any type.
But on the basis of total numbers, the above
rank is based on official statistics.
In January 1947 the total number of gas
stations was · generally given as 205,000,
but the official report for 1939 showed a
total of 241,858 stations. The war is said
to have decreased the total number by
about 25 per cent, an official tabulation
for 1944 giving the total as 172,700.
The postwar trend revealed a decided
spurt upward in 1946, as veterans began
to open stations, but this movement is said
to have slowed down to some extent. At
its annual meeting in December last, the
National Congress of Petroleum Retailers
reported the total number of retail gas sta-
tions to be about 225,000. This figure
'would suggest a gain of about 20,000 sta-
tions for the year 1947, although the J anll-
ary and December figures were reported by
two different sources.
Stations Va ry
Operators will consider gas stations as
prospective locations on basis of accessibil-
ity and also on basis of traffic or business
done. Gas stations vary from the small
cross-roads grocery that may have one or
two gas pumps to the syndicate establish-
ments that cost thousands of dollars. The
Saturday Evening Post recently reported a
super station near Los Angeles that cost a
million dollars to build. Government bu-
reaus usually group stations on basis of an-
nual sales into two groups, those having
annual sales of less than $20,000 and those
having annual sales above $20,000. Of the
231,000 individually operated stations re-
ported by the government in 1939, a total
of 201,000 had annual sales of $20,000 or
less.
The national average of sales in 1939
was $11,670 annually, while for 1946 the
average annual sales was running ahout
$18,000. Statistics are not available to show
at what annual sales level a station becomes
a profitable location for coin machines.
Bulk vendors are placed in small stations in
some areas and games may be used to help
pay the overhead on small stations also, by
catering to habitual players.
Before the war, more than half of the
individually operated stations were located
in or near towns having a population of
2,500 or less, or on the highways. Annual
sales of these stations averaged about
$7,433, but some highway stations do a tre-
mendous business.
As to ownership, stations are classed as
either individually operated, or as a chain
system. During the recent scarcity of gaso-
line, independents have complained much
that chain or syndicate systems had an
advantage in getting supplies of gas. The
large operating firms usually have the ad-
vantage in placing coin machines, in most
all cases vendors, in the large chain systems.
Individual operators of machines naturally
gain most by catering to individually owned
stations.
There are some chains that are national
in scope but the majority are probably COIl-
fined to city trading areas. An oil trade
paper reports on a locally owned chain in
Buffalo which now operates 44 stations in
the city, and plans to build 2e new stations
as fast as conditions permit. Similar opera-
tions can be found in many cities over the
country.
When an attempt is made to classify gas
stations so that operators could decide on
which would be suitable for some type of
coin machine, it is found that endless varia-
tions exist in the thousands of stations in
all parts of the country. Even climate has
much to do with the type of machine that
may do best in a gas station, as shown by
the competition in placing soft drink ven-
dors over the South during the summer of
1947.
A book could be written on the variations
in types of gas stations, in different sections
of the country, and the setup and type of
business they do. The chain systems of
stations, and the large operating firms that
seek this type of station, have worked out
checking systems and also plan more on
vending machines in postwar merchandising
plans.
The individual operator who works in a
limited territory can find no better rule
than to study each station in his territory
and make actual tests of different types of
machines_ The one thing he needs to keep
in mind is that a new postwar expansion
in the gas station field is under way, al-
though delayed by construction problems,
and that . gas stations will use more coin
machines than ever and become more im-
portant for coin machines.
What Machine s?
As suggested, the best thing the indi-
vidual operator can do in his territory is to
work out a plan to test stations and also
types of machines that make a profit in
them, guided by his own knowledge of his
territory. Past history also offers a lot of
experience to guide in types of machines
for stations, keeping in mind that times are
changing fast in the postwar period.
1. The summer of 1947 indicated that the
emphasis is on soft drink vendors, of the
bottle type, the movement being pushed by
competition among the major manufacturers
of soft drinks to get outlets for their brands.
The use of manual coolers for several
years before the war, at gas stations, had
shown the value of the outlets for drinks,
and had created a ready-made market for
the vendors. The rush to get out the vendors
was in the southern half of the country last
year, and will be repeated during 1948.
Here, climate is proving a big factor be-
cause of the much longer outdoor season.
The success of soft drink vendors in gas
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stations is already proved. Now, it is a case
of how well the individual operator can
get into this field. Development of small
drink vendors will increase the number of
stations that will be profitable.
2. Candy bar vendors, with accessory gum
and nut vendors, may be classed as the sec-
ond type most widely used. Even large
operating corporations, like Automatic Can-
teen, have found gas stations to be success-
ful for these types of machines. Bulk ven-
dors, separate from candy or other vendors,
are found in gas stations all over the coun-
try. Placing of the bulk vendors apparently
depends on the enterprise, or competition,
among local operators.
3. Cigarette vendors have spread into
gas stations somewhat on a regional basis,
probably due to the expansion of the cigar-
ette vending industry itself on that pattern.
Since cigarette vending has become most
concentrated in the East, it is in this reo
gion also that cigarette vendors appear to
be most common in gas stations. There are
some industrial areas, like Detroit, in which
cigarette vendors are numerous in gas sta-
tions. There appears to be no secret about
succeeding with cigarette vendors in gas
stations; the station traffic determines sales.
4. Placing of amusement machines in gas
stations depends much on the territory and
also on the type of station. If the station
features a restaurant or sandwich counter,
games are often found. Territory seems to
count more than anything, since some in-
teresting variations will be found in differ-
ent parts of the country. The writer has
ohserved county seat towns in the South in
which gas stations would have an outside
platform or counter built up to place a row
of small amusement devices, classed by
Uncle Sam as gaming devices. Interesting
setups can be seen in other sections of the
country also.
In some sections, a gas station having a
sales volume of about $lO,OOO annually may
have inside the small building a couple of
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games, a counter game or two, bulk vendors
and maybe a candy bar machine.
In other words, gas station placements
are as variable as the country is wide. THE
REVIEW check would indicate that amuse-
ment machine olJerators have more interest
in gas stations than other groups of opera-
tors. Exclusive music operators seemed to
have little interest in such locations.
Chang ing Conditions
Operators should think more of gas sta-
tions as locations for the next few years
because a lot of business changes are tak-
ing place. This review of gas stations is be-
ing published in our March issue also, be-
cause the coming summer will be a good
time for operators to think more of such
spots in all sections of the country. Some
of the business influences affecting gas sta-
tions that operators should ponder are as
follows:
1. Big plans have been made by the oil
companies, local chains and individual own-
ers for expanding gas stations. Building
shortages handicap the expansion now but
new stations are going up.· Plans had been
made for ultra modern stations on a big
scale, but reports on stations built last year
suggest they are pretty much on the pre-
war size, but more modern and set up to
provide for merchandising goods other than
gas and oil. Here again, merch andising
ideas vary considerably, but such big chains
as Firestone are setting a definite merchan -
dising ideal.
2. If an operator wants to study the gas
station field, all sorts of information is
available, ranging from the monthly govern-
ment reports on a regional basis to specific
data issued by various agencies in the oil
and gas trade. There is no sho(tage of busi-
ness information on the gas station field_
3. Current shortages and trade conditions
affect gas stations in several trade regions.
In 1947 travel agencies reported that the
noted travel centers seemed to lose trade
in favor of the smaller centers. In tourist
areas, the motoring public looked for motels
and smaller centers rath er than the expen-
sive hotels. This condition is expected again
in 1948. A report issued the last week in
January says motorists will find less gaso-
line next summer than in 1947; new cars
have not yet met demand and owners will
he more afraid to venture far in old cars
than last year.
4. The new postwar emphasis on selling
a variety of goods at gas stations gives
more opportunity for modern vending ma-
chines. When building of new factories be-
gins to slack, the expansion in gas stations
should gain even more.
5. All signs suggest that people will spend
more time at gas stations in the future, for
th e modern gas station will become a small
store or shopping cenler. Before the war,
gas and oil made up about 75 per cent of
a station's business. During the war, the
proportion dropped to about 50 per cent.
In the future, sales of other merchandise
will account for a' bigger proportion of
station revenue, and coin machines will
have a bigger place in providing revenue.
6. Self-service stations and even coin-op-
erated gas pumps are definitely in the post-
war picture.
7. The big postwar road building pro-
gram, not yet 'u nder way, will boost all
types of gas stations on the central routes.
8_ When production of cars an~ gas
catch up with demand, gas stations will get
a much bigger part of the consumer's dollar
than ever before. Gains are being made
fast now, with car registrations in 1947
showing a gain of about two milliim over
1946. On July 1, 1947 total passenger car
registrations for the U. S. stood at 27,521,-
395. Every state had shown substantial
gains in car registrations.
9. Sales volume in gas station s ha s shown
a good upward trend in th e two postwar
years. The last official report, for Decem-
ber, shows the average gain in sales for
stations over the country to have been 9 per
cent ; average gain for 1947 was about 10
per cent.
In the light of these and other important
business facts, every operator should give
gas stations a bigger place in his future
planning - because the whole gas station
business is ' due for much bigger expansion
over a period of years.
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CINCINNATI-There are about 150 gas
stations serving as coin device locations
here. Since most stations have large out-
side areas and only small cubicles for offices,
which are seldom visited by patrons, oper-
ators are prevented from placing machines
in more sites.
It is not feasible to place cigarette ven-
'dors, for instance, on the outside. They are
too large and subject to weather condi-
tions, and to being damaged by autos being
serviced.
Of the 150 stations, less than a dozen
are of the 24-hour variety, which is the only
kind boasting cigarette machines. At these
places, riders frequently alight and enter
the building, either to purchase accessories
or to visit rest rooms.
However, probably the largest factor de-
termining the placing of cigarette machines
is the $25 state cigarette license required
for each location. A lot of cigarettes must
be sold to yield a profit under such a
heavy onus, and operators say receipts are
only fair.
Nearly all of the 150 stations under dis-
cussion have 'candy, gum, and nut machines,:
and many have soft drink vendors.
Nuts and ball and stick gum sales are-
only fair, but candy is another story. Turn-
over here is as a rule very good, because
many oil stations are located in districts
with officeS' or factories in the vicinity, but
with few food stores.
Hence, the fac tory and office personnel
soon learn candy can be bought at the cor-
ner station, adding to the receipts.
Asked if he would advise a new operator
to cultivate gas station locations, a veteran
operator said that with the high cost of
supplies and equipment there would be
little profit for the tyro. Present operators,
h e stressed, must use old apparatus to make
ends meet.
In addition to this, there is a $5 health
department license required for each loca-
tion vending edibles. This was ,raised from
$2.00 '1anuary 1, 1948, and many seasoned
operators have been compelled to pull ma-
chines from gas stations because they can't
bear even this slight additional expense.
What has been said about candy holds
good, in the main, for drink vendors.
The whole picture will probably be al-
tered greatly as soon as prices of supplies
and equipment reach their proper level;
it is hoped then that the gas station with-
out a coin-operated device will be a rarity.
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203 Eo Los Feliz Blvd .. Glendale 5, Calif.
• • • • • • • • • • • • • • • • •
COIN MACHINE REVIEW
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