Will Another Gas Station Increase Price Competition?

Today I'm looking at whether the new Wawa, still under construction, will affect the price of gasoline in the local market. My guess: not by much. 

Fuel pumps have yet to be installed at the Kendall Park Wawa site.

I've looked at several existing Wawa stores that already sell fuel to see if there's a trend. And it's hard to find one. In the Old Bridge area, Wawa is among the cheaper gas stations, but in Jamesburg and Bridgewater it's at the high end of the gasoline price spectrum.

The two Wawa locations in Old Bridge sell regular gas for $2.37/gallon, according to GasBuddy website at 3:08 p.m. That compares with $2.36/gallon, the average price of the 10 cheapest gas stations in Old Bridge. The lowest price on the list is $2.33/gallon, the price at Lukoil, 19 Petroleum and Sunoco. It's important to note, though, that Wawa stations charge the same price whether the customer is paying with cash or by credit card. Many of the cheapest gas stations charge extra, usually about 10 cents a gallon, if you pay using a credit card.

Jamesburg, Bridgewater Markets

In both Jamesburg and Bridgewater, Wawa's price was $2.45/gallon. That's still not bad, considering the average price for the state of New Jersey is $2.48/gallon, according to GasBuddy.

In the Jamesburg/Helmetta area, Wawa was the most expensive of six gas stations, at $2.45/gallon, according to GasBuddy. The average price for that group is $2.41/gallon. Wawa also sells gas at $2.45/gallon at its Bridgewater location, making it the highest price among six gas stations in the Bridgewater/Bound Brook area. The average in that group is $2.43.

Back to Route 27

On Route 27 in the Kendall Park/Franklin Park area (and slightly north into North Brunswick and Somerset), the average price for regular grade gasoline is $2.36/gallon, with the most expensive being $2.39 a gallon, the price at Exxon, the BP at Finnegans Lane, and the Valero on Route 27 south. The cheapest is $2.29/gallon at Raceway and the Valero on Route 27 north in North Brunswick.

Sunoco's gas price is just above the average of $2.36/gallon on Rt. 27.

The opening of the store represents a trend seen across the country. About 80% of gasoline is sold in the U.S. is through convenience store chains, according to the website for NACS, the association for convenience and fuel retailing. Major petroleum companies, meanwhile, have been getting out of retailing to focus on pumping crude oil and natural gas out of the ground. While many gas stations still have brand-name petroleum company signs, chances are they are independently owned.

Wawa, so far, hasn't responded to my requests for comments on the opening of the store.

"This Stretch of 27" covers business on Route 27 between Finnegan's Lane and Route 518. What's your story? Email me at lkiesche@gmail.com

Liz Kiesche
Liz, a business journalist, formerly worked for Bloomberg News in Princeton and New York.

The Signs, They Are A-Changin'

(Headline revised as of Sept. 21, 2017, 4:16 pm, EDT-- Previously "Making Sense of the Census: Changing Demographics)
As I mentioned last week in "What's on the Menu: Restaurant Census", a lot of new Indian restaurants have opened since I first moved to the area in 1989. Poring over U.S. Census Bureau data for Franklin Park (zip code 08823) and Kendall Park (zip code 08824), it's not surprising. The percentage of the population that identify themselves as Asian Indian jumped to 25.1%, according to an estimate of 2015 statistics, from 21% in the 2010 census. And there's a big difference between the two towns. Almost one out of three people living in Franklin Park (29.6%) is Indian, while more than one out of five people in Kendall Park is Indian (21.8%).  

Under Five Declines

So I looked at what else has changed in terms of demographics. With three childcare centers within three miles, the number of children under five years old must have increased, right? Maybe not. The number has decreased to 1,197 in '15 from 1,307 in 2010, an 8.4%

decline. The '15 estimate, though, may not accurately reflect the area's demographics. The U.S. Census Bureau's website estimates the number of Franklin Park children under the age of five in 2015 at 660, with a margin of error of plus or minus 212. That's an enormous margin of error.  

The Over-60 Set

Let's look at the other end of the age spectrum. How about those older than 60? (And, really, 60 isn't that old.)  We've heard a lot about the aging of the population. Maybe the next trend will be adult daycare facilities and health related services, such as dialysis centers. I certainly see enough adult daycare vans driving around town (though I haven't seen any actual adult daycare facilities on this stretch of Route 27). Overall, the figure appears fairly stable between 2010 and 2015. Seniors living in both towns total about 3,098 in '15 (or 14% of the population), compared with 3,043 in '10 (also about 14% of the population). 

Again, there's a significant difference between the two towns. People over 60 years old accounted for almost 15% of Franklin Park's population in 2015, up from 12% in 2010. Meanwhile, in Kendall Park, senior citizens accounted for 13.2% of its population, down from 16.2% in 2010. 

Diversity Analysis

How are other racial/ethnic demographics changing? Diversity is definitely on the rise. White people make up 46% of Franklin Park/Kendall Park's combined population, and there's a stark contrast between the two towns. In Franklin Park, 30% of the population is white, while in Kendall Park that number is almost 58%. The percentage of the two towns' population identified as black or African/American is 12.7% in '15, up slightly from 12.1% in '10. In Franklin Park, the figure is 23%, while in Kendall Park it's 5%.

Hispanics/Latinos made up 8.41% in '15  of the two zip codes, up from 6.9% in '10, with the percentage similar in both towns. Those who identify themselves as two or more races are increasing as well. In Franklin Park they make up about 5.9% of the population, up from 3.3% in '10; and in Kendall Park, only 2.37% of the population describe themselves as two or races versus 2.14% in '10.

The average household income in the area rose about 4% in 2015 from the previous year, according the the Census Bureau's estimate, with a rise of almost 6% in Kendall Park to $147,014 and 1.9% in Franklin Park to $113,878.

Looking at the bigger picture, the area's total population is increasing at a faster rate than U.S. population overall. Kendall Park/Franklin Park's total population rose 4.8% from '10 to '15, according to the Census Bureau's estimates and data, while the total U.S. population rose 2.5% during that same period.

Let me know what's going on in your business on Route 27 between Finnegan's Lane and Route 518. Email me at lkiesche@gmail.com

Liz Kiesche
Liz, a business journalist, formerly worked for Bloomberg News in Princeton and New York.

Gasoline Prices: The World Turned Upside Down

Wait! What's going on? The Raceway and Valero north of Finnegans Lane always have the cheapest price around here, right? And Exxon is always the most expensive. Well, the Exxon part is still true. But now Raceway and Valero, which are practically across the street from one another, are the same price as Exxon. But wait--if you pay using a credit card, then Exxon is cheaper than Raceway and Valero.

Since Hurricane Harvey shut down some refineries in the Houston area, gasoline prices have, of course, risen in New Jersey, as they have around the country. At the Raceway, just north of Bennington Parkway/Finnegan's Lane, the price jumped 40c/gallon to $2.799 (cash price) from $2.399. 

As of noon today (Wednesday, Sept. 6),  the lowest gasoline price $2.749 (when you pay cash) at Valero on 27 South.

At the BP on the corner of Finnegans Lane, the price is now $2.759/gallon. Again, it's unusual that BP's price is lower than the Raceway's. The BP at the corner of Allston Road and Sunoco, both close to Route 518, are selling gas at the same price as the Finnegans Lane BP.

Sunoco just north of Route 518

                                                                          

    How to account for the discrepancies? For one thing, there may be two different products they're selling. When I stopped at the Finnegans Lane BP earlier this week, I noticed a label on the gas pump, "May Contain Ethanol."  Ethanol is cheaper than gasoline. According to Business Insider, today's price for ethanol is $1.57/gallon. The average price for a gallon of regular-grade gasoline today is $2.80, according to the website GasBuddy. That's a big difference. So some of the refiners may be adding ethanol to the mix.  If you notice your miles-per-gallon decreasing, that's probably the case.

Then there are the dynamics of fuel retailing. Here's how it works. Branded fuel (such as BP, Exxon, Shell) costs more because there are more costs inherent to the product, such as advertising, research and additives. Unbranded fuel retailers rarely advertise and don't include additives in their fuels, so they sell at a discount to branded fuel.

A hurricane can mess with the supply/demand unevenly. A lot of gasoline is refined in the Houston area, and many of them had to shut down for awhile because of the storm. Some may take longer to get up and running due to storm damage. About 20%-25% of U.S. refining capacity was disrupted by Harvey, CNBC says. This may have hurt the supply of unbranded fuel more than it did branded fuel. Therefore, when supply falls and demand remains the same, the price goes up. 

Of course, once the refineries are all up and running, the gas prices may all revert back to their normal order of things. Hurricane season isn't over yet, though.

Lucky for the Texas and Louisiana, Hurricane Irma doesn't seem to be heading their way, but does appear headed for Florida. That may actually reduce demand for gasoline temporarily. Tropical storm Katia, which formed in the Gulf of Mexico, is expected to make landfall in Mexico. Stay tuned. Gas prices could be in for bumpy ride this year.

Let me know what's going on in your business on Route 27 between Finnegan's Lane and Route 518. Email me at lkiesche@gmail.com

Liz Kiesche