Low gas prices lead to layoffs at Rifle convenience store
July 1, 2014
RIFLE — Six employees of Swallow Oil Co. will be out of work on Monday, when the company’s Corner Store will begin to be operated as an automated gas station and car wash, according to owner and president Kirk Swallow.
The move is being made due to a sharp drop in gasoline sales at the store, at the corner of Railroad Avenue and Ninth Street, and for the company, since the opening of the City Market fuel station in late April, Swallow said.
“Our volume is down 30 to 40 percent because there is cheaper, unbranded gas out there now,” Swallow said. “Even if I can sell our branded gas 10 cents a gallon cheaper, the numbers just aren’t there.”
When the City Market pumps opened for business with much lower prices, other gas stations and convenience stores in Rifle dropped their gas prices by some 20 cents overnight to try to stay competitive. Since then, prices have edged back up. Regular unleaded was selling for $3.75 a gallon at the Corner Store on Tuesday.
Swallow has had the Corner Store for rent or sale for the last six to eight months. Swallow said business at that station declined greatly when natural gas workers left due to a downturn in activity in 2008 and afterward.
Now, Swallow said he doubts the Corner Store will survive, but the move gives him time to prepare for environmental cleanup requirements once the store is closed.
“We’ll see what happens,” he stated.
The layoffs will save the Rifle-based wholesale oil and gasoline supplier around $10,000 in labor costs, Swallow said.
“I’ve already cut back hours we can afford to pay people,” he added. “The gasoline business, and really any business, just isn’t very good in Rifle right now.”
Swallow Oil Co. operates several convenience stores in Parachute and Rifle, and supplies some stores from Silt to Aspen with gasoline. The company has a bulk plant in West Rifle. It also offers snow-plowing service for retail institutions, such as restaurants and banks, as well as residential customers.
Swallow Oil Co. has supplied oil and gasoline products to the region since 1951 and employed between 45 to 50 people before the City Market gas station opened, Swallow has said.
Swallow said because City Market is allowed, under state law, to use grocery revenue to keep its gasoline prices much lower than his and other convenience stores, the smaller operators can’t compete on a level playing field.
The Rifle City Market gas station has affected gasoline sales at other stores from De Beque to Carbondale, Swallow said, because people outside the area are willing to drive the extra distance to save on gas.
The fallout for Swallow gas outlets, such as the Red River Quick Mart, 702 Taughenbaugh Blvd., and the Bookcliffs Car Wash and Phillips 66 station, 134 W. Centennial Parkway, may be the same, Swallow said.
“I think you’re going to see some of the other City Markets add gas tanks in the near future, and I predict within a year [the Rifle] Wal-Mart will add pumps, too,” Swallow said.