Fill 'er Up: Hotelling and the Gas to Grub Conversion

Any of us that live on JPA will likely have noticed the new Fry's Spring Station restaurant that opened on the corner of Maury Ave earlier this summer. I thought the Service Station-to-Pizzeria was an interesting conversion and was surprised to find out that it is actually a common form of reuse of abandoned stations, as this Dallas-Forth Worth article details.

For this to occur, obviously old stations have to close. The old Fry's Spring Station, which closed early on in my time at UVa, is across the street from an Exxon, across the corner from a convenience store with WoCo gas pumps, and down the street from a BP Station. There were four gasoline sellers within a stone's throw of each other. We know from our discussion of Harold Hotelling's Stability in Competition why these stations cluster as such to try and gain the majority of the market by being slightly closer than the competition. The most curious part of this conversion, is that the new business is furthering the occurrence of this clustering - it is right across Maury Avenue from Anna's Pizza. And so the cycle may begin again.

Stephan Parry has employed the site of a business that possibly succumbed to the price wars that Hotelling posits may begin when merchants sharing a customer base compete strongly. However, he has perhaps unknowingly employed that site to enter into another Hotelling-style conflict in competing with Anna's Pizza.