Steve Mario, owner Goffstown Mobil in Goffstown, NH, wanted to generate more business for the repair shop side of his business. Instead of advertising, he decided to sell gas at cost. After one month, he has seen business more than quadruple in the repair shop.

Below is the article as it appeared on the Union Leader website.

Giving back — one dime at a time

By GREG KWASNIK
Union Leader Correspondent

GOFFSTOWN – When Kathy Grant-Connor rode her motorcycle past Goffstown Mobil on North Mast Road the other day, she thought she was hallucinating. The price for regular unleaded gasoline, according to the sign, was $2.55 a gallon.

"This is incredible," said Grant-Connor, who filled up the tank at the station yesterday, at a new low of $2.50 a gallon. "I actually rode by the other day and did a double-take on my bike and I said, ‘This must be a mistake. It can’t be right.’"

But it was right, and for many motorists, it was good. At $2.50 a gallon, gasoline at Goffstown Mobil was 28 cents below the New Hampshire average, according to the AAA Daily Fuel Gauge Report. The station’s prices for special and super unleaded — $2.69 and $2.79, respectively — are also about 30 cents below the state average.

So why the low prices?

Steve Mario, owner of Goffstown Mobil, said he and his wife, Sonya, started selling their gasoline at cost about a month ago after deciding that doing so would be the most effective way to generate business — and give back to the community.

"Instead of spending money on advertising … instead of giving money to charities where we don’t know where the money goes to, we decided that we were going to give it back to the people who have been our loyal customers for the last six years," Mario said.

Mario said his typical markup on a gallon of gas is typically 10 cents, after accounting for 5 cents in credit card fees. Rather than pocketing that dime, Mario decided to return the money to his customers.

"The end result is you typically net about a dime on a gallon of gas. A dime isn’t very much," Mario said. "We can use that … and make hundreds of people happy."

Mario, as it happens, is one of those happy people. Cutting back the price of gas has more than quadrupled his auto repair business, which he runs out of the gas station.

"We’ve got people I haven’t seen in years, and we’ve been talking to more people about getting their cars fixed, which is what this is all about," Mario said. "The more people that come in and I service their cars, the more I can afford to sell gas at cost, because now we’re making money on that end."

Mario said his auto repair business initially got a boost at the beginning of the recession, when cash-strapped drivers brought in their old cars for tuneups and other maintenance. Recently, however, the recession has downshifted onto Mario’s shop.

"They’ve been going, some people, for two years and they still don’t have a job," Mario said, "And now they have no money, period. Even if the car is broken, they can’t afford to fix it."

Judging from the customers at Mario’s pumps yesterday, the price cut is having its intended effect. James Palys of Weare said the average price of gas he sees on his drive to work is between $2.78 and $2.85 a gallon. Spending $2.50 to fill up his truck at Goffstown Mobil makes a difference, Palys said.

"You’re talking a 20-gallon truck, at 25 cents a gallon, that’s 5 bucks right there," Palys said. "Five bucks every week on a fill-up, you know? That adds up."

One other gas station in Goffstown has joined Goffstown Mobil in cutting prices. John Sylvain, who owns and operates the Direct Gas station in Goffstown Village, was selling regular unleaded for $2.59 yesterday.

As the owner of the independent, four-pump station, Sylvain said he started lowering his price several weeks ago, after the wholesale price of gas plummeted along with the stock market. Sylvain said the larger chains haven’t caught up yet.

"I kind of have to do my own thing here," Sylvain said. "If I watched the other guys too close, I’ll be out of business."

Sylvain said he often has an incentive to move his gas quickly, since his supplier will give him a lower price the faster he reorders his product. Unlike the larger chains that can afford to keep their prices high, Sylvain must be flexible with what he charges, keeping prices in tune with the market. Even though gas prices may be high, Sylvain said, he doesn’t see much benefit from it.

"Profit-wise, you don’t get a lot of money selling gas," Sylvain said.

To read this article on the Union Leader website, visit http://www.unionleader.com/article.aspx?headline=Giving+back+–+one+dime+at+a+time&articleId=6ed65fa7-add0-4e6e-b5cb-bec184cfcaee.