Special to the Herald/Review
Sierra Service Center had the joy and pleasure of hosting the city’s only gas protest last weekend. Likewise, we have been promised protests exclusively at our location in the future.
Sierra Service Center is a locally-owned family business with a single location. Frustrating as it may be to people having no business experience, basic economics dictate that a small fish in a small pond has zero leverage when competing with many larger fish in that same pond. A short-term sting might be possible, but without extended resources to prolong market leadership, a business will be eventually extinguished.
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Quite simply, we are a follower. We are not, never have been and never will be a leader in this market as regards setting street prices. Our philosophy is to survive. Whenever possible we try to match the lowest street prices, but depending on cost prices and inventory, this is not a given. Our pockets simply do not have the depth of our competitors.
I have personally received telephone calls from Rick Grosinsky, defacto gas protest leader, telling me he will protest gas prices only at Sierra Service Center. He has further confirmed he will use all of his influence on Fort Huachuca to disrupt our food mart business and our auto repair service business. This he will do until Sierra Service Center alone lowers prices to a level he feels is acceptable. Once these criteria have been met, he has assured me he will use all of his resources to promote our business. This is a classic shakedown operation.
He has no plans whatsoever to protest against the competitors down the street — those who set prices. These competitors with multiple locations throughout the state will not feel any heat from Mr. Grosinsky. He is content to burn the small business, although professing conditional support through the other side of his mouth.
As a matter of fact, Sierra Service Center came within days of closing down during this past summer due to crushing costs and cash flow issues related to the out-of-control upward spiral in fuel prices. We, as owners, had exhausted all sources of liquidity to pay off fuel companies, credit card companies, various tax authorities and utility companies. Health insurance for our company employees was canceled. We are still trying to recover from these debts and get out from delinquent notices. The situation became so bad we actually halted gas sales for a time. We got several “attaboys” from our customers, but unfortunately attaboys do not pay bills or keep valued employees on the payroll.
There are those readers who would gleefully like to see us go under rather than pay higher fuel costs. A rhetorical question: Had Sierra Service Center gone under, would street prices be lower today? Would our protesters have the onions to go after the big boys? Is Sierra Service Center so crucial to the establishment of street prices that we alone hold the answer to Cochise county gas prices? Are we the single clearinghouse? Emphatically, no.
Neither do we have the possibility for gimmicks such as Fry’s offers. Sure, you get 10 cents per gallon discount, but at what price? Statistically, the national fill-up average is eight gallons. Eight gallons will get you 80 cents in discount at Fry’s. But how much did you need to spend to qualify for the 80-cent discount? Do the math and you will find, with careful shopping, alternative sources of groceries can be found in town that will save the average consumer significantly more than 80 cents per $100 in grocery purchases. This can be spent more wisely at other gas stations and save more money than purchasing gas at Fry’s. Don’t get me wrong, I think it is a clever marketing device and wish we had some way to pass a similar “savings” on to our customers. But things being what they are, we cannot afford the addition of supermarket just now.
Near term, my guess is fuel prices in Sierra Vista will continue downward for awhile and someday reverse and go back up again. Market forces will prevail, they always do. Cycles generally prevail in this industry. Sometimes gas retailers will make money, sometimes they will not. There is no doubt 2008, has been a lousy year for consumers and retailers in the gas business (do not confuse retailers with producers!). The problem is that in 2008, the up and down cycles were exchanged for a steady upward trend and all of us were scrambling for alternative ways to get around and find ways to pay for our gas.
Not everybody was able to find a car able to get 75 miles per gallon like Richard Filipone. If he thinks that hurts, try buying a load of gas of 8,600 gallons and selling it at a loss because, you guessed it, the folks who actually set prices down the street, displayed street prices that were not keeping up with dropped fuel load prices. Ah, those pesky deep pockets again. It is not for the faint of heart. It can trash a bank account overnight.
So, no excuses. If Mr. Grosinsky, protesters, et al, wish to exercise their rights by attempting to shakedown Sierra Service Center, they may do so. We take the position that we will continue to follow, not lead, street prices. Some good days, some bad. We will try to survive and serve our customers with service and a smile. We will do our best to keep our valued employees gainfully employed. If Mr. Grosinsky wants to use the power of Fort Huachuca as he claims, to bring us down, I trust he has higher support to knock down the doors of small business. Keep this in mind fellow small business owners, you may be next.
JIMMY HARLAN is owner of the Sierra Service Center, 296 E. Fry Blvd., in Sierra Vista.
