Gas stations go head to head

PALMER — Increased competition in Palmer’s gasoline market will test local drivers’ loyalty in a struggle between the lower prices of a giant and improved customer service from one of the oldest stations in town.

The first Fred Meyer gas station in the Valley celebrates its grand opening Friday, with pumps opening Wednesday or Thursday, company spokeswoman Melinda Merrill said.

Anchorage-based Pinnacle Construction began work on the site at the corner of the Glenn Highway and East Arctic Avenue on July 13. When completed, the $1 million station with seven double-sided dispensers can serve 14 cars simultaneously.

Fred Meyer has a reputation of offering gas at a lower price than surrounding service stations. Merrill said it’s not that its base prices are lower, but discounts Fred Meyer shoppers get through its rewards program can take up to a dollar of the price of each gallon.

“Shoppers earn one point for every dollar they spend. For every $100 dollars spent in a month, they get a 10 cent per gallon discount,” Merrill said. “Each time you go to the pump, you can select if you use your discount or not. You can save up (to 1,000 points).”

Whatever the formula, the end result is cheaper gas. This is bad news for the other guys.

Directly across East Arctic Avenue from the new Fred Meyer station is a Tesoro owned by Fisher Fuel. While he is not the original owner, Brad Fisher said his is the location of one of the first gas stations in Palmer.

With profit margins of 1.5 to 2.5 percent, Fisher said he cannot lower his prices to meet those of his new competitor.

“I’m sure it will hurt my business,” Fisher said.

Not deterred, Fisher said he plans to fight back instead of closing up shop. He said he plans to remodel and put new siding on his building and perhaps expand the convenience store.

“We haven’t done this before because of the mom and pop place right next to us. We always tried to compliment each other,” Fisher said. “Now, we have to look at it from a different perspective.”

In addition, Fisher said he plans to have gas pump attendants at his station, something Fred Meyer does not have.

“We are going to spruce up the service and see if that helps keep the local customers,” he said. “We’re going to see what they offer, see what their price is. But we are going to compete with them.”

Contact Todd L. Disher at todd.disher@frontiersman.com or 352-2252.