Nfld. & Labrador

Faced with going out of business, gas station owner drops prices to compete with chains

Dave Callahan had to reduce gas prices by four cents a litre at Central Service Station in St. George's to compete with larger chain gas stations in nearby Stephenville.

St. George's gas station has been serving the area but is going head-to-head with the big companies

Dave Callahan had to drop his gas prices to compete with bigger chains in nearby Stephenville. Customers were driving by and he was at a risk of closing. (Colleen Connors/CBC)

Independent gas station owner Dave Callahan in St. George's was going out of business and had to come up with a way to compete with larger chains in nearby Stephenville.

Customers frequently stopped by his station and bought five or 10 dollars' worth of gasoline to get them to Stephenville, a 25-kilometre drive away, where they would fill up at Esso or Ultramar, chains that typically offer lower prices and attractive points systems.

"I had to take it upon myself to take that margin away from what we make to match the prices in Stephenville so it was no longer really attractive to go there to fill up," said Callahan, who owns Central Service Station.

The solution? Four cents. That's how much Callahan dropped the price of gas per litre.

Callahan's independent gas station has been serving the area for 60 years. (Dave Callahan/Facebook)

Central Service Station has been offering gasoline for 60 years and was much more popular when locals had to pass by the shop in St. George's to fill up.

Callahan says people stopped coming to fill up, though, when new highway access roads were established. 

He risked closing altogether but since discounting his fuel, Callahan said he has seen a big difference with customers coming back and filling up their tanks.

Pump it up

"We are trying to do things by adjusting the fuel prices and adjusting our hours of being open and some weekend exposure soon, To try to give the customer what they want and make them comfortable coming back and using our pumps." 

Although Callahan is not making as much money now that he lowered his prices, he says he still makes enough to pay for maintenance on the building and pay gas attendants.

He plans to add a few more things to bring more customers back to his store. 

"Run it like an old-school service station where we do your windshield, check your oil and all that kind of stuff to bring back the service, as well as the price," Callahan said.

Read more from CBC Newfoundland and Labrador

With files from Newfoundland Morning