Delhi, Delhi India (PressExposure) March 02, 2007 -- Higher prices of gasoline are a subject of repugnance not only for the customers, but the convenience store retailers are also finding it as a challenge. Since, the increased prices are badly affecting their profit margins. The main reason behind the continuous decline in profit margins is that costs, especially credit-card fees, seem to continue to escalate relentlessly.
A study that was completed by âNational Association of Convenience Storesâ, in February 2007, for the stores selling gasoline and accepting plastic reveals that credit-card fees had cost an average of US$ 45,785 in the year 2005. The figure actually eclipsed the average per store pre taxing revenues of US$ 42,196 in the same year. Credit/debit fees totaled about US$ 5.4 Billion on an industry wide basis.
Most people prefer to make payment by plastic as the prices of gasoline increase. This may be either because they donât carry cash (or probably they donât want to spend it) or because they attempt to avoid the immediate pain of paying higher prices. As credit card billing system gives them some time to pay up the money.
Use of plastic money at pumps increased with the constant rise in average annual prices of gas, which grew from US$ 1.85 in 2004 to US$ 2.27 in 2005. The enormous increase in the prices of gasoline during the year 2005 has accelerated this trend. NACS consumer statistics show that about 65% consumers today prefer to pay their gasoline prices via credit cards.
RNCOS has published a report on âU.S. Convenience Stores: A Market Analysisâ. As per RNCOS, credit card fee typically costs a convenience store about 3% of actual transaction thatâs made up of several components like PIN based debit transaction, interchange and acquiring fees. Credit card transaction is drawing much of the concern for the convenience store retailers, as it may cost more for the stores than any other channel such as supermarkets, hypermarkets and so on.
Retailers are now considering cash discounts due to the continuous rise in credit-card expenses. These retailers generally offer a discount that ranges from 1 cent to 6 cents on each gallon for the customers who make cash payments. This way the retailers are trying to share the savings of cutting down the credit-cards expenses with customers.
About the report
RNCOS report on âU.S. Convenience Stores: A Market Analysisâ answers the key questions such as âWhatâs the market size of US retail store industryâ, âWhatâre the driving factors for this sectorâ etc. The report further analyses the state-wise growth of convenience stores and provides an overview of key players in US Convenience Stores Industry.
RNCOS, incorporated in the year 2002, is an industry research firm. It has a team of industry experts who analyze data collected from credible sources. They provide industry insights and analysis that helps corporations to take timely and accurate business decision in today's globally competitive environment.
For more information visit: [http://www.rncos.com/Report/CP11.htm] Current Industry News: [http://www.rncos.com/blog]