Nearly 60 years ago, an innovation forever changed fueling—and even retail as a whole—when convenience store operator John Roscoe flipped the switch at a convenience store in Westminster, Colorado, to activate the first U.S. remote access self-service gasoline pumps. On June 10, 1964, the store only sold 124 gallons of gas to a dozen or so customers, but selling fuel would never be the same.
It was unheard of to pump your own gas in 1964, and it was also prohibited in most of the country, based on state fire codes. (Today self-service is still prohibited in New Jersey and Oregon, as well as in scattered municipalities across the country, particularly in Massachusetts.)
Back then self-service was hardly the norm. After all, the first self-serve grocery store, where customers picked items instead of handing over a list to a clerk, didn’t exist until 1916. But in 1964 the time was ripe and the possibilities for self-service fueling were fertile.
“There is growing recognition in the petroleum industry that the auto has revolutionized all retailing—except the retailing of the gas station! It is even seeping into the awareness of this industry that car traffic is now shopping traffic, and that more cars, driven by men as well as women, stop at gas stations every day than drive up to any other outlet, including perhaps the food outlet! No other retailer so completely wastes such a remarkable traffic count as does the gas station!”
—Legendary advertising and marketing executive E.B. Weiss in the 1964 book, Management and the Marketing Revolution
Gas stations had dabbled in self-serve before the 1960s. In 1947, Frank Urich opened the first self-service gasoline station in Los Angeles. The unbranded station featured rows of gleaming pumps and girls on roller skates who zoomed around to collect money and reset dispensers. At these early self-serve stations, the pumps ran by a mechanical computer that allowed an attendant to manually turn the pump back to zero for each new customer. The worker also collected money and returned for customers who pumped their own fuel.
Some unbranded stations switched to this type of self-service for gasoline, but the idea didn’t catch on with many retailers at the time. The major oil companies continued to compete with one another via unique gimmicks—such as gasoline-pump shaped salt and pepper shakers—and promoting clean restrooms. And customers remained very loyal to particular fuel brands.
John Roscoe initially wanted nothing to do with remote access self-service gasoline. He had opened his first convenience store in 1957 in Denver and by 1964 was operating a chain of 12 stores in the area. One day, Roscoe recalls, a man named Herb Timms stopped by with a box he had invented that would allow an attendant inside the store to dispense gasoline at the pumps.
One of John Roscoe’s Big Top stores before fueling was added (circa early 1964)
“I was initially reluctant,” said Roscoe, “But fortunately for me, my banker knew Herb and he convinced me to give his invention a try.”
Business took off, and Roscoe quickly added remote fueling to two more stores. By July, the stores were averaging 4,500 gallons in sales per week. (Roscoe talked about this and other innovations in this 2011 NACS video.)
“What made self-serve so important to the convenience store industry was that we already had the facility,” said Roscoe. “By spending $10,000, we effectively got the gasoline business from full-serve gas stations without their labor expenses. Convenience store sales had averaged about $300 a day and developed about $100 a day in pre-tax margin dollars. However, if you could sell 1,000 gallons of gasoline with a 10-cents-a-gallon margin, you could double your margin without adding much to your expenses.”
(In the 1960s, gas margins were much like other retail margins, and it was common to have 10-cent margins with gas priced between 20 to 30 cents per gallon. Today, gross margins on gasoline are approximately 20 cents per gallon—but expenses are much greater. After expenses, including credit card fees, pre-tax net margins are approximately 5 cents per gallon.)
For remote self-service gasoline to expand, regulatory changes were necessary. “Most state laws had provisions that forbade self-serve dispensers in service stations,” said Bob Benedetti, who is responsible for the flammable liquids code project for the National Fire Protection Association.
Gradually, 48 states changed their fire codes to allow for self-service dispensers. “Some thought there would be an increase in the incidence of accidents or fires at service stations with self-service dispensers, but that never materialized,” said Benedetti.
Despite the change in state laws, acceptance within the convenience store industry moved at a snail’s pace. “The idea was so foreign to the established line of thinking that some convenience store owners thought it was ridiculous, that no one would want to pump their own gas,” said Fred Lowder, who co-owned the Jiffy convenience store chain with his father.
To encourage others to join the self-serve fold, Roscoe offered to speak about his success on a panel called “New Concepts of Merchandising for Profit” at the 1964 NACS Annual Meeting.
“I was with a person [on the panel] who operated a meat market in Portland, Oregon. After the presentations, all of the questions from the floor were directed to the meat market operator. Gasoline sparked no one’s interest,” said Roscoe.
While the panel presentation did not grab store operators’ attention, Roscoe’s fuels sales did. “John would send out a printout of his gasoline volume and that got my attention,” said Lowder, who became president of NACS in 1966.
“A good share of convenience store operators didn’t have the $10,000 to invest in the device, so overall acceptance was extremely slow,” said Roscoe, who traveled the country drumming up interest in the technology, which he became licensed to sell. “It probably took at least 10 years before there was much acceptance by the industry.”
Lowder agreed: “It took more than a decade for the tipping point in self-service to happen. It was a process for the industry to finally figure out that they couldn’t have a convenience store without gasoline, and self-service was the way to go.”
Initially, the major oil companies resisted self-service gasoline, seeing no need to change their operation. “However, the oil jobbers who were running many stations saw the economic advantage and began to adopt self-service gasoline and convenience stores,” said Roscoe. “The advantage was so strong that eventually the entire gasoline marketing system was changed.”
“Self-service will grow. It won’t take over all gas retailing—not at all. But it will gobble up a sizable percentage—and it will compel the gas station, finally, to become a modern retailer.”
—Advertising executive E.B. Weiss in a 1966 article in Gasoline Retailer.
The 1973 and 1974 gasoline shortage further fueled the drive to self-service. Long lines at gas stations prompted California to pass a law that every station had to post price signs if they weren’t already doing so. “People waited in line a long time and didn’t know what the price was until they got to the pump. Then they had to buy gas or go to another station and wait in another line,” said Jerry Cummings, a retired oil executive with California-based Robinson Oil Corp. “The price-posting law made gasoline more generic and that really helped self-service.”
The public, on the other hand, loved the idea from the start. Because convenience stores could sell unbranded gasoline from self-service pumps cheaper than the branded, full-service stations, customers flocked to convenience stores for their fill ups.
“The public is interested in lower prices, and immediately went for self-service gasoline,” said Roscoe. With gasoline typically selling for 20 cents per gallon, a discount of 2 cents per gallon translated into a 10% savings. “That was significant enough to bring people in.”
Gasoline sales certainly drove traffic, but even in its early days it didn’t necessarily drive profits as retailers operated on increasingly thin margins to attract cost-conscious customers.
“If you decide to go into the combination food and gasoline business, you’ll find that gasoline will be a small part of your margin…You’ll need to make 80% or better of your total margin dollars from selling things other than gasoline.”
—John Roscoe in a 1976 speech to oil executives. Nearly 40 years later, convenience stores pump a then-incomprehensible 161,000 gallons per store per month, yet gasoline today only accounts for about 40% of margin dollars.
In the beginning, one of the biggest challenges was how to integrate ease of payment into the self-service experience, said Scott Negley, director of global product management for Wayne.
In the mid-1980s, credit card readers were integrated into pump dispensers, the forerunners of today’s pay-at-the-pump technology. Before pay-at-the-pump really took off, engineers had to figure out how to make the card readers work with a variety of different networks and point-of-sale systems. “The solutions had to be adaptable or configured for a wide range of systems controlling the equipment at stations,” said Negley.
Roscoe jumped on pay-at-the-pump in the early 1980s, debuting it at select stores in Benicia, California, in 1984. His vendor, Cubic Western, had developed a pre-paid gas card and installed card readers, similar to the technology used in rapid mass transit, into the pumps to read the cards. “We adopted their system and later moved on to credit cards,” he said, adding that pay-at-the-pump made it easier for customers to fill up.
However, not everyone in the industry embraced pay-at-the-pump. “Some people thought it was a stupid idea because customers wouldn’t go inside the store anymore and in-store sales would drop,” said Negley. “But what they found was the opposite: Sales went up because the experience inside the store was better without gas-only customers clogging up the line.”
Bob Renkes, executive vice president and general counsel for the Petroleum Equipment Institute, agreed that fuel marketers were initially reluctant to install pay-at-the-pump technology because they feared profit loss from in-store merchandise. “I think those who did initially put in pay-at-the-pump didn’t lose traffic inside but probably gained it because they were providing quick and easy access at the pump.”
“Buying gasoline is already a distressed purchase, so anything a retailer can do to make it less stressful is good,” said Negley. “Pay-at-the-pump has done that.”
Fast-forwarding to today, there’s no doubt that remote self-service dispensers have transformed the gasoline industry. “It changed the convenience store industry forever,” said Roscoe. “It allowed convenience store operators to locate on better sites and increase their overall attractiveness.”
One of those pioneering stores is still in operation in the metro-Denver area.
Self-service will continue to be a part of gasoline dispensers for years to come, although the method of payment might change as technology allows for mobile phones, contactless payment and other technologies that will take the place of credit or debit cards. “The only thing to change will be the evolution of payment,” agreed Negley. “With that, we have to meet the challenge of offering more security” for pay-at-the-pump consumers.
Fifty-six years later, self-service continues to evolve the retail landscape. By the mid-1960s, 7-Eleven had introduced self-serve, to-go coffee and self-serve fountain soda, and by decade’s end the first ATM was introduced. Today, consumers can order groceries by scanning QSR codes located on digital signs in train terminals. They can also order groceries online and schedule an at-home delivery. Deposits are made into checking accounts by scanning paper checks via mobile banking apps. The possibilities are extraordinary.
But think bigger: Would the Internet as we know it exist without the introduction of self-serve gas? Or even the typical experience of today’s travelers, who can order airplane tickets and book a hotel online, confirm check-ins at the airport and the hotel and select and scan their own items at a store—all without a face-to-face interaction? Remote fueling was really the first instance where customers interacted with a machine to define what they were buying.
Self-service speeds up transaction times, increases ordering options and helps take costs out of the system. But most of all it has redefined convenience and the convenience store industry.
The introduction of remote fueling in 1964 revolutionized the industry, while a number of events before and after its introduction helped make its growth possible.
1920s: Some coin-operated stations exist, such as Gasamat stations in the Rockies, which continued through the 1960s.
1930: The 20-store Hoosier Petroleum Co. attempts self-serve fueling, but the California fire marshal deemed the practice a fire hazard and put a stop to it.
1939: Socony-Vacuum Oil Co. develops the shut-off valve, which is the forerunner of today’s cut-off valves.
1947: Frank Urich opens the first modern self-serve gas station at the corner of Jilson and Atlantic in Los Angeles, California. With the slogan “Save 5 cents, serve yourself, why pay more?” Urich’s station sells more than 500,000 gallons in its first month. Urich adds to the excitement by driving empty tankers up the station, making it seem like supply was constantly being replenished to meet heavy demand. A number of other independent stations begin to offer self-serve, primarily in California, the Southwest and the Southeast.
1957: The first automatic hold-open latch/shut-off valve was approved by the NFPA Sectional Committee on General Storage of Flammable Liquids and later by UL (Underwriters Laboratories). This innovation allowed fueling to continue while attendants took care of the drivers’ other needs, such as washing the windshield or checking the oil. It also set the stage for self-service by reducing the likelihood of spills if fuel is pumped by untrained drivers.
1964: On June 10, the Supertron Remote Control Gas Station system is installed at John Roscoe’s Big Top convenience store in Westminster, Colorado. Within a month the store is averaging nearly 500 gallons per day. Previously, self-service required an attendant to reset the pumps after each fueling and also collect the money at the fueling island. By November, Supertron units are operating in seven states. The units allow retailers to sell fuel at a lower price, typically two to four cents less than other stations.
1965: Several major oil companies say that they would try self-service, generally coin-op, but cannot legally do so because of state fire codes.
1966: Estimates put the number of self-serve stations between 500 and 1,000 sites, mostly in the West. A major oil company, American Oil Co. (later named Amoco) tests it at two sites, but closed them both after it conducted the test to gain more information. Only 17 states permit self-serve fueling, and there are also many local ordinances prohibiting it.
The first self-serve unit opens in New York at a Clay Oil station in Poughkeepsie, New York, coincidentally next to a firehouse.
About 50% of stations in Stockholm, Sweden, are self-serve, and there are 2,000 self-serve stations in West Germany.
1967: The New York Supreme Court rules in March that local ordinances barring self-serve fueling are illegal. The case relates to the city of Yonkers passing an ordinance prohibiting self-serve unless the fueler had a “certificate of fitness.” The decision paves the way for others states to similarly eliminate full-service mandates.
1968: The City of London (U.K.) permits the use of unattended fueling. British Petroleum announces that it will open units within the city.
Twenty-three states continue to ban self-service, according to the Colorado Petroleum Marketers Association.
1969: In May, a revision to an amendment in the National Fire Protection Code is clarified at its annual meeting. The Fire Marshals Association of America has a heated discussion at its annual meeting on self-serve. It approved the recommendation to allow it, as long as there is an attendant on duty during hours of operation. The move was advocated by the National Self-Service Gasoline Association, which was formed April 1, 1969.
1969: Humble Oil & Refining Co. kicks off a multi-state campaign to test self-serve.
1970: Self-service is now at 4,600 stations in 33 states, according to Dresser-Wayne, up from 2,500 in 1969, 1,500 in 1968 and less than 1,000 in 1967. An estimated 75% of these locations are in the West and Southwest.
1972: The Los Angeles Fire Department’s Fire Commission, with much controversy, recommends permitting self-serve at the city’s 7,000 stations. Estimates put self-serve operations at 7,500 of the 220,000 stations throughout the United States.
1973-74: OPEC announces an oil embargo against countries (including the United States) that supported Israel during the October 1973 Yom Kippur War. Arab nations establish strict supply quotas and oil prices to shoot up nearly four-fold. This oil price shock led consumers to find ways to save on their fill-ups, such as using self-serve. And it led to a big increase in convenience stores selling self-serve gas. In 1973, only 13% of convenience stores sold gas. In a decade, that percentage quadrupled to 52% in 1983. Today, 80% of convenience stores sell fuel.