Gasoline negotiations put an end to Baker’s and Village Stores
On Monday September 12th, the Thetford community was rocked by the ListServ announcement that Baker’s Store in Post Mills would be closing the next Sunday, September 18th. The Village Store, a few miles away in Thetford Center, has already been closed since the spring. A few sentences encapsulate the reason: “We have been working to get the gas contract sorted out for two years; however, they continue to drag their feet on the negotiations. We have not been able to recover from the losses we experienced at Village with the loss of fuel revenue.”
From the get-go, contract negotiations with Global Partners, the wholesaler that provided CITGO gas, have stymied Cameron Gregory, who owns both Baker’s and the Village Store. Soon after he acquired the two stores, he applied to have the contract for gasoline transferred from the previous owner to him. It seemed like it should be a routine matter. However, it became apparent that Global wanted him to purchase the gas pumps, underground tanks, and associated equipment that up until then had been owned by the gas corporation.
In the course of the extended negotiations that followed, Cameron found himself dealing with three proposals coming from three different vice-presidents. The first VP was laid off in mid-negotiation, and their proposal was abandoned. A second proposal was negotiated with the replacement VP and was ready to sign, which would have led to an actual contract being sealed. That VP abruptly quit his job the day before the signing. Cameron then worked on yet another proposal with a third VP. With each round of negotiation, six months to a year elapsed, while the terms in each proposal became less and less favorable for the two stores.
Another blow was dealt sometime before April, when Global shut off the card readers on the gas pumps. The corporation said it was obliged to adhere to a federal compliance requirement or risk being fined on a daily basis, even though this violated the previous owner’s gas contract that specified card readers at the pumps. When Cameron complained that he was losing a significant amount of business, Global lawyers maintained that the old contract was not valid, thus removing any chance that Cameron could fall back on it. Mounting a legal challenge to this assertion would have been prohibitively expensive.
Baker’s had taken in $30,000 in credit card gas sales that were in a Global account. Cameron could not retrieve it, so he bought gas that generated one month of sales. Then, for the last five months, including the critical summer season, purchasing more gas for the store was not feasible and there were no more gas sales.
In May, he had accepted the latest proposal from Global. However, it was not actually approved by Global till two weeks ago. It was then that Cameron saw the terms and conditions for the first time. They provided virtually no protections for him, while giving plenty to the corporation. Thus the contract was sent back for further negotiation. Meanwhile, the loss of an estimated $60,000 to $100,000 in gross gas sales and the associated sales from inside the store had become unbearable.
Both Baker’s and the Village Store were listed for sale on business real estate websites. Baker’s has generated interest. Cameron hopes that a business that already owns multiple gas stations in the region will be the next owner.
As for the Village Store, Global wanted to see 250,000 gallons of gas sales per year. The 4,000 gallons a month sold at the Village Store did not interest them. What’s more, one of the store’s underground tanks, the one that stored the premium gasoline, is defunct, which meant there was only regular gas for sale. The volume of gas sold was below what would persuade the corporation to finance a new tank for the premium gas, and Cameron couldn’t afford to replace the tank himself. That would cost $300,000, with an 18 month lead time.
Cameron is optimistic that Baker’s will have a new owner “fairly soon.” He would like it to be “someone local who would get involved in the community and have Baker’s continue as a vital community resource.” He’s made various improvements, like two new pizza ovens and a cooking range, ensuring that the store has capacity to make “lots of pizzas” and other hot foods. And because there is a regional labor shortage, the current four employees will likely have the opportunity to go on working there.
Photo credit: Li Shen