Service station convenience comes at cost

The Woolworths supermarket and BP service station combined on Jervois Rd in Herne Bay. Photo / NZ Herald

Convenience or low prices?

That's the choice you have to make when you choose your local service station over the supermarket.

An unscientific survey conducted by the Herald yesterday showed that buying grocery items from the local supermarket could save you about a quarter of your bill.

A purchase of eight items, including milk, bread and toilet paper, revealed savings of $11.13 if customers took the time to go to the supermarket.

But Bev Frederikson, who conducts supermarket surveys for Consumer NZ, said service stations were not doing anything to mislead consumers.

"They're there for convenience, they're not competing on price as well," she said. "People buy from BP because it's open, because it's handy, not because they're competing for cheap prices ... you pay extra for convenience.

"Most people know if you want something for cheap, you're not going to go to the service station to buy it."

The bargaining power of the supermarkets was greater than that of smaller service stations and they could get better deals from suppliers.

Ms Frederikson said the fact that supermarkets were selling a broader range of products in greater volumes than service stations also meant that they could afford to make less profit on each item - in some cases selling "loss leader" items at less than cost to draw people in.

BP spokeswoman Diana Stretch said BP Connect stores, such as the one at Herne Bay where the survey was conducted, aimed to meet customers' needs for convenience and "top-up shopping" and offered a wide range of products.

"We do not, however, have the buying power of the two large supermarket companies [Foodstuffs and Progressive] so are unable to purchase the products at the same prices they can.

"We do try to create value for our customers by offering a budget range and with deals such as two or three items for a reduced price, which we take a lower margin on," Ms Stretch said.

"For example, currently in our Connect stores we have a bread offer of three loaves for $4.99 and a milk offer of two 2-litre bottles for $5.99.

"Our offer is about convenience, allowing our customers to pick up grocery items they may have forgotten or need for top-up shopping at the same time as they get their fuel, in this case 24 hours a day, seven days a week."

Murray Jordan, general manager retail sales and performance for Foodstuffs Auckland, which owns the New World stores, said supermarket owner-operators were focused on offering customers a "great range of fresh foods and grocery products and a high level of customer service for a good price".