Garage Sale Economics May Explain Why Prices Are Holding Up

Comment on the March 18 prediction: Prices are lower, but in some place not by much. $1.54 in Grand Haven last weekend!

Thursday, March 26, 2020, 8:00PM: I think when it comes to gas prices lately, we have to use garage sale economics. How many readers have had a Fri-Sat garage sale, and by noon Saturday, no one is stopping to see what you still have. At that point, you may be tempted to put out the “all items 25%” sign, but it doesn’t help, because there are no customers. So, you might be better off leaving the prices whole, just in case someone arrives to look. I suspect many gas retailers are doing the same thing. The stations I track on Lake Michigan Drive were stuck at $1.94 for almost a week, and today are on their second day of $1.85. But the evidence is that they have much fewer customers. No gas war, when wholesale prices are 50 cents cheaper? Garage sale economics may be why.

The easy prediction is still to expect lower prices. But how much lower? -EA

Updated: March 26, 2020 — 8:01 pm

7 Comments

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  1. I wonder how much gas sales are down.

  2. I am a manager at a Kroger in Indiana. Right now our fuel gallon sales are down 37% from last year.

  3. Yesterday my fuel center was down 57% in fuel sales vs. last year

  4. Is there any chance Kroger will extend fuel points? I have a bunch that expire tomorrow, but like a lot of other people right now I’m essentially not driving. Everything I have is still pretty much full from last month.

  5. Read an article indicating that retailers can’t switch over to Summer Blend until they sell all of the Winter Blend. Looks like that annual Spring increase in price will have to wait.

  6. BTC – As far as I know corporate hasn’t given any direction about fuel points and extending them. Recommendation that I can give you is to call 1-800-KROGERS and see if they can do anything.

  7. UDF just announced they will be extending theirs thru May 31st.

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