Gas stations sued for saving consumers money
This post was published 2 years 11 months 17 days ago and its content may not be valid anymore.According to the Denver Post, venues which sell gas below cost are breaking the law! [via] The $1.4 million settlement will force companies to rethink their ploy of winning customer loyalty by lowering gas prices.
This month, King Soopers and City Market (both owned by Kroger) were forced by a federal jury decision to cut out a program called Buy Groceries/Get Gas — which offered consumers modest savings on gas purchases.
Two “independent” gasoline stations in Montrose brought the suit and were awarded $1.4 million in damages. The jury found the big stores had violated Colorado’s Unfair Practices Act, illegally selling gas below cost.
Yes, King Soopers was selling gasoline too cheap. It’s illegal.
On a related note, how my readers have made the switch to a hybrid vehicle in the past year or so due to increasing gas prices? What gas guzzling or sipping machine to you utilize to get from point A to point B?
Although this seems counter-intuitive, there is a good reason for this. We (well, I) don’t want big corporations taking a loss selling gas (or anything else) for a few months (because they can afford it), putting other people out of business, after which they can sell at whatever price they want sans competition.
I’ve been driving the same car for 6+ years. It’s paid for. Switching cars to save gas is a rather poor way to save moeny, since you are going to have to pay for the car.
Also, Kroger = Walmart. Ugly tactics to squeeze out competition.
Definitely no hybrid, but gas was one of the reasons I traded in my 6spd RX-8 gt a few months ago on a new 4cyl mazda6. maintenance costs (like very expensive tires) was another reason. and insurance.
but the most important reason was getting pulled over every few weeks. literally. only 1 ticket out of them all, but it still sucked. I don’t really look or dress like i’m 25 and make good money, and was suspected of carrying drugs once, suspected of being drunk another time, and again suspected of drugs (and got frisked and my car searched).
/sigh
and i live in a nice city
I have to agree with the 4 cylinder rule for gas savings. I’ve clocked my car at 30mpg for long trips, and in the mid to high 20s for normal use. That’s not bad for it being a small SUV.
It’s not just retailers like Kroger/Costco, it’s big gas chains like BP, Exxon & Marathon.
They can afford to drop their prices, and make it up in volume elsewhere, and drive the ma/pa gas station across the street out of biz.
Mustang 2006. 18 MPG baby.
I don’t believe there are too many ma/pa gas stations left – it’s just not a good business to be in by yourself.
Why shouldn’t Kroger or anyone else be allowed to reduce the price of one item they sell, to entice consumers to buy others? If they do that too much, won’t they go out of business? Isn’t that capitalism?
If everyone cut out the coupon for 50 cents off a cup of coffee at xxx coffee shop (which reduces the price to a loss), they’d go out of business quickly. XXX coffee shop calculates that only a few percent of people will actually do it. Why can’t a gas station take a calculated risk?
Oh – and yes, Walmart does this ALL the time. They take a loss on selling a hot new product to get people in the door, who turn around and buy $50 worth of other items to net a profit from the shopping trip. Now, I hate Walmart as much as the next guy (and I actually never shop there), but that’s business.
If another gas station wants to compete, they can try to compete in the same vein and reduce their prices – or better yet, offer something Kroger can’t/doesn’t. They can offer better services: nicer & cleaner bathrooms; friendlier service; wash every customers windshield; have a gas-sale one day a week; sponsor a local youth team and publish that to everyone. There are a lot of ways American businesses can compete w/o involving the courts.
Oh – and I live in NYC and ride the subway/bus. I don’t drive any car.