SIC 5541 Gasoline Service Stations

Encyclopedia of American Industries | 2005 | Copyright

SIC 5541
GASOLINE SERVICE STATIONS

This category includes gasoline service stations primarily engaged in selling gasoline and lubricating oils. These establishments frequently sell other merchandise, such as tires, batteries, and other automobile parts, or perform minor repair work. Gasoline stations that include other activities, such as grocery stores, convenience stores, or carwashes, are classified according to the primary activity.

NAICS Code(s)

447110 (Gasoline Stations with Convenience Stores)

447190 (Other Gasoline Stations)

Industry Snapshot

In recent years, almost 127,000 gasoline service stations operated in the United States. These establishments took very different forms than they had before, with self-service islands and ancillary retail outlets—convenience stores, known as C-stores—creating major changes in the distribution of market share.

The total number of stations has been steadily decreasing since 1982, reflecting a trend by major oil companies to close smaller-volume franchises and concentrate on maximizing gallonage at major locations. Cost cutting in the oil industry in general, as well as environmental legislation mandating upgrades for the gasoline service station industry, meant that most dealers were looking for ways to reduce expenses and increase sales. This was especially true in the early 2000s. Traditional "mom-and-pop" style stations were frequently a casualty of market changes; consumer emphasis shifted more toward large, multifunction, automated outlets. To survive, gasoline service stations will continue to expand the range of goods and services they offer and emphasize convenience to the consumer through automatic pay machines, more self-service islands, and streamlined traffic flow organization.

Organization and Structure

The U.S. market for consumer gasoline had four major competing categories in the 1980s, 1990s, and early 2000s: service stations, which offered service through at least one bay and had a volume greater than a set limit (typically 20,000 gallons per month); pumpers, which had more than six nozzles and had a volume exceeding a set limit (typically 50,000 gallons per month) and possibly having such ancillary services as a C-store, car wash, or remote bays; convenience stores, with a minimum of 600 square feet of retail space, the primary business of which was the sale of food items, typically with one or two islands and fewer than six nozzles; and others, facilities with gasoline volume below minimum volume for pumpers or service stations that may also include ancillary services such as a C-store, car wash, or bays. All of these competitors except convenience stores fall under this classification. In 2003 industry players pumped 370 million gallons of gasoline each day in the United States, according to the American Petroleum Institute. This was a 2.4 percent increase from the previous year.

Within this relatively simple categorization of outlet types, a complex web of supply sources and brand loyalties exists. More than two-thirds of gasoline service outlets were branded by major oil companies by 1992, a trend that continued into the early 2000s. Managers of branded stations, called dealers, either owned their own station or rented from the branding company—the latter were "lessee dealers." Dealers bought gasoline either directly from parent companies or from branded...

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