Albertsons is getting out of the fuels business and selling 51 stations across seven states to Tesoro. From a fuels price management perspective, this means competitor strategies and daily volumes will need to be closely watched as these Albertson stations are rebranded. Over time it’s likely there will be some market reaction and change of customer behavior as the Tesoro flag is waved at these locations.
The Bespoke Investment Group issued a statement saying that despite crude prices topping $100 a barrel today, retail fuels prices are not likely to rise in response. That’s because Bespoke says retail fuels prices have been responding much more closely to changes in Brent crude, than with WTI. And Brent crude has not gone up in price.
“As long as Brent crude continues to underperform WTI crude, rising oil prices will be less of a drag on US consumers than they have typically been in the past,” Bespoke wrote.
From a fuels price management perspective, this is important because fuel analysts may choose to stop tracking WTI prices, and instead focus on the performance of Brent crude, when anticipating future price moves.
Mondial Assistance conducted a phone survey of 1000 adults over age 18 in the US and issued a report that holiday travel will be up by 7% this year, from 50% in 2010 to 57% in 2011. Car travel makes up 56% of all holiday travel.
From a fuels price management perspective, this is an indicator that the upcoming holiday season is likely to have increased fuels volume sold as compared to last year.
In Spartanburg, SC, another fuel price war was initiated by a c-store grand opening. Promotional temporary fuel prices for a new QuikTrip caused a race to the fuel price basement. In response to the promotional pricing, the nearby Raceway and Kangaroo lowered their fuel prices, resulting in some of the lowest prices in the country, with unleaded fuel at one point hitting bottom at $2.80 per gallon. That was enough to cause unnatural traffic patterns to the point where state officials needed to be called in to solve the traffic problem.
This price war started over a month ago back in October, and still has a ripple effect in Spartanburg. GasBuddy reports as of today seven c-stores with unleaded fuel priced below $3.00 per gallon, with two stores at $2.83. The remaining 44 c-stores in Spartanburg are priced anywhere from $3.00/gallon to $3.35/gallon.
From a fuel price management perspective, it’s another lesson learned there is no substitute for fuel pricing analysts keeping up with local field market intelligence, and using human insight when setting optimized fuel prices. The retail fuel price market has too many unexpected influences that drive prices out of traditional patterns.
Retail fuel margins for the third quarter were 21.9 cents per gallon, versus 18.5 cents in the third quarter of 2010. For the first three quarters of 2011 retail fuel margins were 19.2 cents per gallon compared to 15.3 cents per gallon for the same period last year. Retail fuel volumes increased 7.9 percent from a year ago to 199.7 million gallons for the third quarter. That equates to 124,423 gallons per store per month on average. According to NACS, the average c-store sells 121,000 gallons of fuel per month annually. That means Susser stores sold about 2.8% more than the national monthly average.
Sam Susser, President and CEO said “We expect to continue to benefit from our geographic market focus in Texas, which is still faring better than many other parts of the U.S. due to our relatively stable housing market, continued strong population growth and robust job growth.”
The Company added five large format retail stores during the third quarter and closed two smaller stores, bringing the total number of retail stores in operation to 535.
For the 2011 fiscal year guidance figure, the report shows a range of $.15 – $.18 per gallon.