By SARAH E. NEEDLEMAN

The pain at the pump is hitting not only consumers but also the owners of the U.S.’s roughly 100,000 independent gas stations. Sarah Needleman looks at the new economics of being an independent station owner. Photo: Brandon Sullivan/WSJ

The pain at the pump is hitting not only consumers but also the owners of America’s roughly 110,000 independent gas stations.

U.S. gas consumption is estimated to be at an 11-year-low, at around 8.4 million barrels a day, down 4.3% from a year ago.

In the face of sharply declining demand for gas, Robert Fisher of Phoenix said it’s increasingly difficult for him to make a profit.

“There have been times in the past month when I’ve been losing money for every gallon of gas I sell,” said the 28-year-old, who co-owns four Chevron gas stations and convenience stores in Arizona, Oregon and Washington with his father, brother and sister. “It’s a very tough industry,” he said.

Lower convenience-store sales and hefty credit-card processing fees are also hurting the economics of gas-station ownership, many owners say.

“The less traffic we have on the outside translates to the less traffic we have on the inside,” said Steve Cohen, who has owned a Mobil gas station and convenience store in a residential part of Elmont, N.Y., for three decades. The amount of gas he sells on average per month is down by about 80,000 gallons from a year ago. Sales of candy, beer and other items are down by about 25% over the same period. “The volume is just slowly fading away,” he said.

Before fuel-efficient cars existed, and back when gas prices were relatively low, it was fairly easy for owners of stations with convenience stores in prime locations to make money. In the 1980s and 1990s, gas prices and rents were low and oil wholesalers offered incentives for station owners, said Mr. Cohen. “They used to offer rebates if you sold X amount of gas by the end of each month,” he said.

Until the past five years or so, many gas stations were, in fact, owned by the big energy companies. But most have since sold off their portfolio of stations to focus on more profitable areas, such as wholesale fuel sales.

Since 2008, for instance, Exxon Mobil Corp.

has sold more than 95% of the roughly 2,000 stations it owned, and it plans to sell the rest by year-end. Chevron Corp.

had 491 company-owned stations at the end of 2011, down from 1,348 in 2001.

Most U.S. gas stations are owned by tens of thousands of individual operators, many of whom have one or more locations. These independent station owners typically buy their fuel from distributors for the major fuel wholesalers like Exxon Mobil and Chevron. The regional distributors own or hire tanker trucks that go from the so-called racks at gasoline terminals to storage tanks at the individual stations.

The station owners, in turn, set their gas prices for consumers so that the average markup, or gross margin, on gas is typically around 15 cents or 16 cents a gallon.

Because consumers these days use plastic even for spontaneous small purchases such as gas, snacks and smokes, the station owners say their margins are eroding. Card-processing fees are typically a percentage of sales—ranging on average from 1% to 3% depending on the card—plus a flat fee of about 10 cents per transaction.

Whenever the price of gas rises, as it recently has to about $4 a gallon, an owner’s profit margins become slimmer. If the bill for a tank of gas comes to $50 and the fee is 1% of the sale price plus 10 cents per transaction, an owner pays about 60 cents to the card processor. But if the price of gas goes up, and you have to charge your customer $60 for the same amount of gas, the fee is now 70 cents.

Frank Reluzco, owner of an Exxon station, auto-repair business and convenience store in Frederick, Md., said that roughly 90% of his sales are paid by credit card today, compared with about 75% five years ago. “It costs so much to fill a tank right now; no one’s going to carry around that much cash,” said Mr. Reluzco.

“I’m definitely hurting,” said Carl Betz, owner of a Getty station and auto-repair shop in downtown Madison, N.J., since 1988. He said the amount of gas he sells today is down about 25% from a year ago. Due to a licensing agreement, he’s required to buy his fuel from Getty Petroleum Marketing Inc. of East Meadow, N.Y., which he said sometimes charges him more than what his competitors down the street pay for gas from other brands.

“This is the worst business has ever been,” said Mr. Betz, who blames the high price of fuel for the difficult conditions he’s facing.

Getty Petroleum Marketing filed for bankruptcy in December, and the CEO of its landlord, Getty Realty Inc.,

recently indicated the company anticipates that future rents will be lower from the roughly 800 gas stations it expects to take back from its tenant at the end of this month.

Getty Petroleum Marketing didn’t return calls for comment.

About 83% of gas stations in the U.S.—92,100—have convenience stores, according to IBISWorld Inc. Their ranks have declined by about 4.5% from five years ago, and their typical profit is about 2% of overall revenue, it said.

Groceries account for about 12% of sales; beer and other alcohol make up about 4%, and cigarettes account for about 7% of sales, according to IBIS. Except for tobacco, these all traditionally tend to have higher profit margins than gasoline, station owners said.

Most owners already have tried to boost the efficiency of their stations by installing self-serve pumps. Gas stations with convenience stores employ roughly 687,000 workers, down from 714,264 in 2007, IBIS said.

Increased competition from supermarkets and warehouse clubs is also a challenge. Issaquah, Wash.-based Costco Wholesale Corp.

added its first gas pumps alongside one of its stores in Tucson, Ariz., in 1995. Today 380 of its 516 locations in the U.S. and Canada sell gas. About 30% of customers who fuel up at Costco also shop at its stores, according to a spokesman for the chain.

“Five years ago, [large chain outlets with gas pumps] were essentially nonexistent,” said Mr. Fisher of Phoenix, whose business employs 125 workers now, down from 200 in 2010. “Today they’re all over the place.”

Some station owners say that the stiffer competition, combined with declining gas consumption, is making it harder for them to upgrade and pay the rent or mortgage on their properties. FedReceiver Inc., a Los Angeles firm that specializes in taking over distressed businesses in California, Arizona and Nevada, has seen a 30% increase in gas-station defaults over the past two years, according to Stephen J. Donell, its president.

Greg Kalajian, owner of an Exxon Mobil station in Pasadena, Calif., since 1983, said his rent goes up by about $1,000 every year, but that his monthly gasoline sales have dropped off by about 60,000 gallons over the past five years. He currently pays about $12,800 in monthly rent for his property, which spans about 30,000 square feet.

“There’s no money in this business,” he said.

Write to Sarah E. Needleman at sarah.needleman@wsj.com

A version of this article appeared April 5, 2012, on page B4 in the U.S. edition of The Wall Street Journal, with the headline: Pain at Pump Is Hitting Gas Stations.

By KRIS HUDSON

CBRE Group Inc.’s

top-of-the-market acquisition of Trammell Crow Co. has turned out to be the deal that keeps on giving.

While the 2006 deal valued at $2.2 billion saddled CBRE with a huge debt load two years before the economy hit the skids, it also vaulted CBRE into the top ranks of the property-management business, giving it a steady stream of income to weather the downturn.

CBRE

Incoming CEO Robert Sulentic said his goal is to continue to expand.

Now, CBRE has made official another benefit it gained in the deal: its next chief executive. The company announced last week that former Trammell Crow Chief Executive Robert Sulentic, who served in several high-level executive roles for CBRE CEO Brett White since the acquisition, will succeed Mr. White at the end of the year.

The accession of Mr. Sulentic, 55 years old, comes at a time when global real-estate companies like CBRE are dealing with stormy economies in many of their markets. With investors concerned about the sovereign-debt crisis in Europe and slower-than-expected leasing in the U.S., CBRE’s stock has declined 38% since its 52-week closing high on May 19. CBRE is the world’s largest real-estate-services firm, with 34,000 employees and 2011 revenue of more than $5.9 billion.

“My goal for the company is to continue to grow, continue to be the best in the world at what we do in serving our customers,” Mr. Sulentic said in an interview.

The decision by Mr. White, 52, to step down surprised many analysts and investors. He joined the company as a sales trainee in 1984, took the top job in 2005, and put his strong imprint on the company culture. The company’s stock has declined 5% since it announced the CEO change last week, closing Tuesday down 33 cents, or 1.9%, to $16.68, in 4 p.m. New York Stock Exchange composite trading.

But Mr. White is making sure that the transition is smooth. He said in an interview that he decided to step away after building CBRE into an industry leader and grooming his successor. Vacating the CEO office also will allow him to leave behind a relentless travel schedule to spend time with his three children, he said.

Moreover, Mr. White is staying on the board and isn’t stepping down as chief executive until the end of the year. Management specialists said the change of command represents the type of methodical succession planning that many companies talk about but rarely practice.

“How many CEOs would like to have a successor behind them who has been a CEO of one of their public competitors, who has worked side by side with them for five years?” Mr. White said. “It’s a really effortless and elegant handoff.”

A graduate of Iowa State University and Harvard Business School, Mr. Sulentic joined Trammell Crow in 1984 as a leasing agent for industrial space after working at PricewaterhouseCoopers LLP. CBRE employees and competitors describe him as a “nuts-and-bolts” operations guy.

One of his challenges will be to retain and attract top brokers. During the depths of the downturn, this wasn’t too hard because brokers didn’t move much.

But as the economic recovery gains traction poaching is expected to increase. “Brokers and firms that perhaps were not doing as well during the downturn or didn’t have the ability to stay in business [now have] a lot of room to stay afloat,” said Anthony Paolone, an analyst with J.P. Morgan Chase & Co.

CBRE has gained market clout by expanding through acquisitions. CBRE has refinanced, extended or paid down much of the $2 billion in debt it took on to buy Trammell Crow, though it later added debt from another big acquisition to put its net debt at $1.9 billion.

“Brett White did pay all cash at the top of the market for Trammell Crow,” said Will Marks, an analyst with JMP Securities who tracks real-estate companies. “But the transaction was successful in that [CBRE] eliminated costs and gained an entrance into a business where the company never really had succeeded. It not only brought CBRE its next CEO but some really seasoned and solid employees, too.”

In another major deal, CBRE last year paid $940 million for ING Groep NV’s real-estate investment-management business in Europe and Asia.

Now, the company likely needn’t make more big acquisitions, Mr. Sulentic said. Instead, it can continue to expand organically around the world.

“For the time being, we believe that the product footprint that we have is right and that the headroom for growth is good within this footprint,” he said.

CBRE’s announcement of the CEO change was timed partly so the news would come out during the brokerage’s annual shareholder meeting on May 8, according to a person familiar with CBRE. Mr. White “had plans to kind of move on with his life for some time” and retiring at the end of this year helps him to achieve those plans, this person said.

—Joann S. Lublin contributed to this article.

Write to Kris Hudson at kris.hudson@wsj.com

A version of this article appeared May 16, 2012, on page C10 in the U.S. edition of The Wall Street Journal, with the headline: CBRE Taps New Vein From Old Deal.

Por DAN FITZPATRICK e GREGORY ZUCKERMAN

Três executivos de alto escalão no epicentro do gigantesco fiasco de investimento da J.P. Morgan Chase & Co. devem deixar a firma esta semana, segundo pessoas a par da situação, e as perdas resultantes das operações aumentaram.

Está prevista a saída, já na segunda-feira, de Ina Drew, que chefiou desde 2005 o grupo de gestão de risco ligado ao prejuízo; Aquiles Macris, responsável pela divisão de Londres que realizou as questionáveis operações; e o operador Javier Martin-Artajo.

Até quinta-feira passada, o banco havia perdido US$ 2,3 bilhões em operações equivocadas de derivativos de crédito, mas a quantia estimada aumentou em cerca de US$ 150 milhões na sexta-feira, segundo uma pessoa a par do assunto. Os executivos da J.P. Morgan estão preparados para sofrer mais US$ 1 bilhão em possíveis perdas no trimestre devido a essas operações, bem como mais US$ 1 bilhão em possíveis perdas ao longo do próximo ano, segundo uma pessoa próxima à situação. Isso significaria um possível prejuízo de mais de US$ 4 bilhões no total, apesar de que as operações em questão também podem recuperar o valor, reduzindo as eventuais perdas, observou a pessoa.

Drew, Macris e Martin-Artajo estão saindo devido ao seu envolvimento direto com os erros que levaram às perdas. Drew definia as estratégias de operação da divisão, e Macris e Martin-Artajo eram responsáveis por implementar as instruções dela e supervisionar o problemático portfólio.

De início, Drew descartou os temores quanto às posições negociadas, disseram pessoas a par do assunto. Mas, quando o montante das perdas ficou evidente para muitos na empresa, ela apresentou sua demissão, que deverá ser aceita pelo diretor-presidente James Dimon já na segunda-feira.

Outro executivo a sair será provavelmente o operador Bruno Michel Iksil, apelidado de “Baleia de Londres” devido às vultosas aplicações que fez nos mercados de crédito em nome da divisão de investimentos. Mas ainda não está claro quando Iksil deixaria a firma, disseram pessoas a par da situação. Iksil era subordinado a Martin-Artajo e a Macris, segundo pessoas a par do assunto.

Através da firma, todos os quatro recusaram solicitações de comentários.

(Colaboraram Robin Sidel, Joann S. Lublin e Carolyn Cui.)

Consumers at their wits’ end over a health-coverage problem sometimes try reaching out to the company’s chief executive. In a surprising number of cases, it works.

Billy Rogers of Dallas says he struggled for months last year to get Anthem Blue Cross & Blue Shield to process bills of around $1,350 from doctor visits. The holdup came because the company was investigating whether Mr. Rogers fully disclosed his medical condition when he bought his policy, he says. The 47-year-old political consultant says he was healthy, though one check after he was insured showed somewhat elevated blood sugar that he says quickly dropped in later tests.

Fed up, Mr. Rogers fired off an email with the subject line “Horrible Anthem Coverage.” It went to Chief Executive Angela Braly and a public-relations official at Anthem parent WellPoint Inc.

He also sent it to several reporters and documentary filmmaker Michael Moore. Within hours, Mr. Rogers says, he got an email from the WellPoint spokesman, and days later the claim went through. The tactic “sends a signal that you’re not going to give up on this,” says Mr. Rogers. “I was really, really angr

iStockphoto

WellPoint and other insurers say they don’t bend their rules just because a consumer carps to a top official. Indeed, companies say that only a tiny share of customer-service matters result in appeals to high-level executives and that such appeals are often unsuccessful. But in general, health-plan officials say they take such missives seriously, partly because they may reflect broader service breakdowns that need to be fixed.

“We want people to know we are very responsive to our members,” says Sam Nussbaum, WellPoint’s chief medical officer. He says he reads written individual complaints sent to him, and sometimes personally calls other company officials to help decide a response. WellPoint says it isn’t able to comment on Mr. Rogers’s specific situation because of federal privacy law.

Many health plans have special procedures for handling consumer issues that come in via their executive suites, though they usually don’t publicize them. These complaints often get reviewed by higher-level officials, rather than shunted back to front-line customer-service representatives. Cigna Corp.

says it refers such communications to a “specially trained service team that is staffed by people who are experts in resolving complex issues.” Humana Inc.

says its chief executive, Mike McCallister, “makes an effort” to read emails sent to him by members.

Reading Every Letter

Aetna Inc.

Chief Executive Ron Williams says he does “read every one personally,” and “when I see a letter that is particularly concerning for whatever reason…I will ask to see the response to really understand the issue.” Aetna has an executive resolution team that draws on internal experts to work out complex member problems that come in to top executives and board members. But the company says these officials “don’t have any extra authority” to alter its rules.

Mr. Williams says that in one incident, a consumer contacted him to protest that coverage through a former employer was mistakenly being cut off just before a major medical procedure. It turned out that because of a glitch in data from the employer, the person’s termination date was recorded incorrectly. The procedure was covered, Mr. Williams says.

Of course, consumers also lodge complaints with top officials in other industries. Airline passengers have received compensation for lost baggage and bumped and delayed flights after reaching out to company CEOs, says Thomas Hinton, chief executive of the nonprofit American Consumer Council. And the Consumerist.com blog is pocked with examples of people who have sought to resolve problems by contacting leaders of firms ranging from computer makers to rental-car companies. “It definitely can work to go straight to the top,” says Alison Southwick, a spokeswoman for the Better Business Bureau.

Trying to resolve problems with a health insurer can be frustrating. A recent consumer-satisfaction survey on health coverage by J.D. Power & Associates found that around 9% of more than 33,000 insured people polled had required three or more calls to resolve a service issue with their health insurer in the past year. Asked about their most recent contact with their health plans, 39% of the respondents said they’d had to repeat the same information to more than one person, and a quarter said they hadn’t gotten promised callbacks.

If you’re thinking of trying the executive-appeal route for a health-insurance issue, here are some strategies to improve your chances.

First, make sure you’ve exhausted all the standard customer-service approaches and appeals. Also, closely document your interactions and the results. If you don’t, you risk being brushed off and sent back to square one. “Stay on the phone until you get the answer that you need” from customer service, including requesting a supervisor, says Jerry Coy, senior vice president for customer service at Kaiser Permanente, the big nonprofit health system. Elevating something to high levels of a company is “for those things that need escalation, that can’t be resolved in that [lower] channel,” he says.

If your health benefits are through your workplace, and the employer has self-funded coverage, the ultimate decision maker may be there, not with the insurer that administers the plan. You may want to check with your human-resources department.

Nancy Davenport-Ennis, chief executive of the nonprofit Patient Advocate Foundation, says self-insured employers sometimes will make exceptions or change their rules. For instance, she says, one schoolteacher whose stem-cell treatment for breast cancer was being denied by her plan appealed to her community’s school board, which voted to start covering such procedures.

Prepare your case and be ready to document it, as you would for a formal insurance appeal. In the case of a denied claim, you’ll want to be ready with the history, including names of the doctors and other health-care providers you’ve seen, dates of services and other details, and records of your interactions with the health plan. You may also want to research scientific or other evidence for the treatment you seek. Consider sending a letter that includes the documentation, even if you plan to start with a phone call. This will help officials research your case more quickly.

Robert Skole, 80, a journalist in Boston, says he fought with Aetna for about seven months over a $1,650 bill for removing a cyst from his wife’s breast several years ago. The insurer said she wasn’t covered under his retiree benefits, though his former company assured him that she was. Finally, Mr. Skole sent a letter to Aetna’s then-CEO, including copies of several of his emails and other documents. A few days later, he got a check for the full amount. “I couldn’t believe it,” Mr. Skole says.

An Aetna spokeswoman says Mr. Skole “did not receive the level of service we expect to deliver, but we were pleased to have the opportunity to fix the problem.”

Strike the Right Tone

Think about the tone you want to take in your letter, email or call. Insurance executives say they give the same treatment to consumers regardless of their attitude. Still, says Jackie Jennifer, senior vice president for service at Horizon Blue Cross Blue Shield of New Jersey, “the more pleasant, I think, the more people are inclined to feel, ‘I really want to help you.’ ”

After Blue Cross of California declined to issue a policy to her husband a few years ago, Becky Castle contacted WellPoint, the insurer’s parent. Ms. Castle says her husband had had a soft-tissue cancer near his ankle eight years earlier that hadn’t returned, as well as a heart condition that was corrected through surgery. She believed he should be able to get coverage because his conditions were in the past.

Ms. Castle, a 39-year-old fundraising consultant in Pasadena, Calif., went online to find the name of WellPoint’s chief medical officer, Dr. Nussbaum, and then made her way through the switchboard to his assistant. The assistant listened closely to Ms. Castle’s concerns, asked her to fax documentation, and promised to look into the matter. Within a week, her husband was issued a policy, though it included higher-than-normal premiums. “You just have to be dogged and not give up, and be polite,” Ms. Castle says.

Although WellPoint says it can’t comment on Ms. Castle’s case because of privacy law, Dr. Nussbaum says the company’s “goal is to try to find a way to cover” people. Sometimes a decision can be altered if a consumer presents new information, he says.

Write to
anna wilde mathews at anna.mathews@wsj.com