I talked to Pete district manager...
Thank you for doing that research. Diane and I appreciate the info as I'm sure many others will too.
However, don't be too quick to assume that TA is not making money off the fuel they sell us. No way they are giving it away. Even at the nice discount we receive, they are making enough to justify the discount and keep their doors open. Their fuel prices have been in effect for a long time and they are pouring millions into upgrading their facilities. If they were losing money on us the discounts would be stopped, don't you think?
I know nothing about how truck stops make money but I believe they do not give their fuel away. Looking into this a little deeper (very little), I found this
travel plaza business projector sample with a Google search. Notice the projected diesel fuel margain after discounts of $0.12 per gallon.
Loooking into it more, I see that TA is publicly held, meaning we can learn quite a bit about the company by digging onto the numbers. I'm not going to do that in depth because the only point I wish to make here is that TA is making good money off fuel sales, even at discounted prices.
I can't speak for them, but it seems that a decision has been made to discount the price to gain volume and thereby make more money overall. It helps too, I would be inclined to believe, to use discounted fuel to draw truckers in and then cross sell other merchandise and services.
From the
Motly Fool web site:
"Fuel represents only approximately 25% of TA's
gross profit. In addition to making money on fuel and non-fuel services/products, TA also collects rents and royalties on subleased space. In addition, TA owns the land and buildings for nine of the locations and a handful of additional land parcels for future development. Together, this represents approximately $50-$75 million in additional value."
From the
Journal of Commerce web site (note the 2010 date):
"TA’s overall fuel revenue leaped 73.5 percent from a year ago to $1.18 billion. But its fuel gross margin dropped from $60.5 million to $50.2 million.
"Revenue from non-fuel sales increased only 1 percent to $261.8 million for the quarter while its margin shrank slightly, thanks to lower-margin products and services."
EDIT: Looking into this just a little further, I came across this white paper:
Truck Stops and Truck Drivers - A Changing Relationship