Everyone must have been sleeping in accounting/economics class. What you are looking at is economy of scale, higher margin required and oil as a profit center vs loss leader.
In our Napa store group, PZ platinum costs us about $5.50 a quart and HQ pays about $5 a quart. We sell it for $5.99 to $6.99 a quart depending on the store. As you can see, Walmart due to their buying power and lower cost of doing business(lower margin), can sell the oil for our cost or less.
Just to turn on the lights, pay salaries, pay rent, support local causes etc, our cost of doing business is approx 29%. If we don't sell for more than that, we lose money. I'm sure NY stores cost of doing business is higher than the midwest.
Walmart (I have a friend who is a store manager)views oil as a loss leader. They sell at a lower margin & sometimes at a loss vs other items because they realize most customers coming into buy oil will buy higher margin items along with the oil.
You just can't compare Walmart vs smaller stores. Kind of like a 1L bottle of Dew is $1.59 in a gas station vs $5 for a case at Walmart-economy of scale.
Just my two cents,
Dave
