What Happened in Petaluma California and is it a Sign Your Business Needs to Adapt?

Earlier this month, the Petaluma California City Council unanimously voted for a ban on new or expanded gas stations within its city limits.  California is already known for its focus on clean energy alternatives:  in 2020, Governor Newsom announced a mandate that all new cars sold in California beginning in 2035 must-have zero carbon emissions.  This follows the heels of the prior executive order signed by then-Governor Jerry Brown mandating carbon neutrality by 2045.  Was the Petaluma California move an indication of where other cities are going?

What was the actual cause of the gas station ban in Petaluma California?

Petaluma California Gas Station BanThe history behind Petaluma’s bold change began back in 2014 when Safeway announced it was building a discount gasoline center with a small convenience store within 60 feet of a school, daycare facility, and park.  In August of that year, city council meetings were filled with furious citizens concerned about the degradation of air quality and increased traffic this would make at the corner of McDowell Boulevard and Maria Drive.  What did the residents want?  They requested Safeway build it on the other side of their property closer to McDowell’s intersection with East Washington Street instead.  For whatever reasons, Safeway wouldn’t budge.

In June of 2018, the City Council provided approval to Safeway to construct its 697 square foot convenience store with 8 pumps (16 dispensers) and a single electric vehicle charging station.  Residents were outraged.  As a result, City Council changed its tune in December and added a requirement that Safeway first complete an environmental review.  Safeway responded saying the Council’s decision in December wasn’t valid because they hadn’t included it on the agenda as required by law.  City Council ended up rescinding the requirement and again approved the plans as submitted in April 2019.  A group of neighborhood residents established themselves as “Save Petaluma” and filed suit to stop the building in April 2019.  While Safeway’s plans to build a gas station haven’t yet been thwarted entirely, they are still battling the issue in court.

In the meantime…

It seems the issue between the citizens of Petaluma California and Safeway’s new gas station brought to light the amount of already existing gas stations within the city.  The Council determined there were 16 existing stations serving its population of 60,000; and in fact, there was at least one fueling station within 5 minutes of every home and business in the city.  Possibly because of the future goals of reducing conventional fuel usage and likely because of what it went through managing the issues around Safeway’s proposed site, the Council decided the city had reached saturation and there was no need for any new stations or expansions to the current fueling businesses.  Fueling stations are permitted to add electric charging stations and hydrocarbon/hydrogen pumps, however.

What does this mean for business owners in the fuel and convenience store industries?

Fortunately, the industry has been anticipating a need for change for quite some time.  Regardless of whether the communities you do business with enact similar legislation, the harsh reality is that the landscape for conventional fuel is changing rapidly.  An article by the Boston Consulting Group in 2019 outlines three ways gas stations must adapt in the near future:

  1. Gas stations must transition from being vehicle-centric to adopting new customer-centric business models. In other words, it no longer suffices to rely on the need for gasoline to attract business, but other aspects such as convenience store product selections, grab-and-go meals, and gift or souvenir items are becoming increasingly important to achieve revenue goals.

Wally’s in Pontiac, Illinois is a great example of this.  With 76 fuel-pumping stations and a women’s restroom featuring 20 stalls, the business has positioned itself to be the “Home of the Great American Road Trip.”  Inside its store, a converted Winnebago serves as a merchandise display and the beverage selection includes iconic sodas from the 70’s and 80’s.  Their fuel station is a place people plan to go to whether they are driving on fumes or not.  Their single station even has its own website.

  1. Gas stations must transform their network of service stations. It’s more important than ever for owners in the fuel and convenience store industries to perform a deep analysis of each site and determine if or how the location can be profitable.  We see evidence of this happening rapidly:  owners are divesting themselves of locations that are not bringing in enough revenue and pouring money into acquisitions of locations showing more potential for profit.  As part of these changes, fuel stations must begin to provide multiple types of “fuel” including electric charging stations and hydrogen fuel to meet customers’ needs as alternative energy vehicles more widely enter the market.
  2. Gas station and convenience store owners must adopt new capabilities for operations. For example, the COVID-19 pandemic introduced consumers to online ordering, curbside pickup, and in some cases even home delivery of convenience store items.  Forecasts estimate this trend will continue as people have adopted new timesaving habits that they enjoy.  It’s time for businesses to conduct a thorough review of their business software to ensure it is not only efficient but that it also provides an optimal experience for the consumer such as contact-less check out and mobile application features.

Where should you start?

Reimagining your business can be daunting and confusing.  That’s where our team of professionals at WEnd Consulting can help.  We can work directly with you and your management team to assess where your business is today and where you want to go, and then we’ll help you map out strategies to get you there.  We’ll bring our proven experience to your business to help you achieve your goals.  All you have to do is contact us to get started.