Independent retailers feeling the effects of discount incentives
Pain in the gas
MASSTOWN - Independent gasoline retailers are feeling the impact of incentives being offered at the checkouts of large grocery store chains.
George Dzuba owns and operates an XTR Gas Stop in Masstown and feels customers are embracing the popular marketing programs and anticipates they will be around for the long haul.
"It does have an impact but it is impossible to measure," said Dzuba.
"You and me and the people don't really get savings because these pennies are already calculated in the margins they have."
The businessman installed gasoline pumps about seven years ago to complement an accommodation business also on the site. He shut down his pumps when gas price regulation came into effect but reopened under the XTR brand about a year ago.
He said customers have slowly been coming back to his service station and is hoping that trend continues but free or discount gas incentives currently offered by grocery giants draw people away from his community and into larger centres to redeem coupons.
While he doesn't like losing business he doesn't feel that type of marketing program should be banned.
"When you prohibit advertising, where do you draw the line?" asked Dzuba.
The Nova Scotia Utility and Review Board (NSUARB) will be exploring that and other issues surrounding the promotion of petroleum products at a hearing in Halifax on Jan. 18.
Paul Allen, executive director of the board, said the review is being done at the request of the government through the process of regulation to offer recommendations.
Eight issues in total will be considered, such as identifying what is considered a promotion, the impact of promotions on rural markets, if they should be allowed and if limits should be imposed on them.
Graham Conrad, executive director of the retail Gasoline Dealers Association of Nova Scotia, is not taking a hard-line position on the issue, but said the promotions are causing concern within the industry.
"Some of the concerns that we have as retailers is what could be next?" he said. "This is a new twist we have never experienced before. When you start promoting gasoline from businesses that are not gasoline related we are concerned about where this is
The organization is also concerned about the promotion of fossil fuels when there is a strong shift in people's desire to reduce fuel consumption.