by John Keller | Feb 4, 2010 | Fuel Pricing Technology
The State College PA based Uni-Mart chain of c-stores bankruptcy was finalized with the selling off of its physical assets to 26 distinct parties as reported here in the local Central PA newspaper Centre Daily Times. The vast majority of Uni- Mart’s assets — 144 of 204 locations — were sold to Kwik Pik LLC, an affiliate of Lehigh Gas, based in Bethlehem. The remaining 60 properties were sold to 25 other buyers.
In 1972, Henry D. Sahakian founded Uni-Mart as a division of Unico Corporation, a family-owned real estate company. That same year, Henry opened his first convenience store in State College, Pennsylvania. Over the next 15 years, Uni-Mart grew and became one of the most successful chains in the Northeast. In December 1986, with 208 stores in operation, Uni-Mart was spun off from Unico and became a publicly traded company on the American Stock Exchange. In July 2004, Uni-Mart finalized a merger and once again became a private company.
In 2004 and 2005, the corporation entered into a “dealerization plan,” following its reorganization as a private enterprise.
However, the dealerization plan ultimately landed the company in a class action lawsuit in 2007, when lessees of 170 stores filed against Uni-Mart, claiming it had committed fraud by failing to provide critical financial information as part of the business transactions. The suit was settled 10 months later, in 2007, for $2 million.
Seven months after the settlement, the c-store chain filed for bankruptcy protection on May 29, 2008. At the time of its filing, the company listed more than $28.5 million owed to its top 30 creditors.
by John Keller | Feb 3, 2010 | Fuel Pricing Technology, Industry News
NACSOnline reported a gas station in Avondale Ohio accidentally had posted a price of $.27 a gallon on their sign, without their employees’ knowledge.
The price continued for 2.5 hours, and customers drove as far as 175 miles to take advantage of the low fuel price. The store employees didn’t notice the low price until customers started paying with cash. No word on how much money was lost during that day.
This is the Fuel Manager’s worst nightmare. And who is to say it couldn’t happen again if the store headquarters isn’t using Fuel Pricing software to monitor the current price of the sign? With the Fuel Pricing technology available today, there’s no reason why a station or c-store would ever have to go through this agony of selling fuel at such a loss.
You can read the article here.
by John Keller | Feb 1, 2010 | Fuel Price Management, Fuel Price Optimization, Retail Fuel Margins
NACS Online published an interesting article about a pricing study conducted at the University of Miami School of Business Administration, where they found a pricing strategy that resulted in a 200 percent increase in sales and a 55 percent increase in profits. An excerpt is pasted below:
“Researchers have found that retailers can increase sales and profits if they increase the price of a sale item to its original cost in gradual steps. The “Steadily Decreasing Discounting” strategy comes after the initial sale when you progressively increase the price back to its regular level versus in one shot.”
“The researchers found that SDD is more effective for two reasons: first, consumers consider past prices but also forecast future prices. So when consumers see a trend of increasing prices, they forecast higher future prices and are more inclined to make a purchase today. Second, if buyers expect prices to increase, they are more likely to make a purchase to avoid feeling regret. With the incremental pricing of SDD, increases are comparatively less significant, and the consumer is therefore more likely to buy immediately—even after having missed the initial sale.”
This research has direct applicability in the volatile pricing environment of the Fuel Manager. As the Fuel Manager adjusts his pricing upward to accommodate for higher replacement costs, he can be more effective if he steadily increases the price gradually over several days, rather than in one shot. As consumers become aware of repeated street price increases, they are likely to fill up sooner rather than later, with the reasoning that they have to jump in to the buying process now before the price of gas goes even higher.
As the Fuel Manager is monitoring the market response to these price changes, it’s more critical than ever to have access to Fuel Pricing software that can make it clear how price changes are effecting sales volume and competitive pressures at each individual store.
by John Keller | Jan 31, 2010 | Fuel Price Management, Fuel Price Optimization, Retail Fuel Margins
The c-store industry is lucky to have the PCATS (Petroleum Convenience Alliance for Technology Standards) organization to facilitate the cooperation and collaboration between customers, service providers and vendors in the c-store ecosystem. One of the sub-groups in PCATS is the Motor Fuels working group.
The Motor Fuels working group promotes electronic communication between retail fuel buyers, suppliers and delivery vendors to:
- Manage fuel inventory levels
- Minimize freight and transportation costs
- Provide speed of order placement
- Improve speed of response to demand changes
- Manage fuel pricing and monitor competitor pricing
The Motor Fuels Working Group established the standards currently implemented by retailers, jobbers and major oil companies using bills of lading, electronic funds transfers, credit card settlements, invoices and fuel pricing.
In 2010 the committee will focus on:
- Developing use cases for existing wholesale fuel and distribution standards
- Refining existing standards as needed to ease implementation
- Developing use cases for retail fuel price management and competitive price collection
- Define an implementation roadmap for new standards
Yours truly sits on the PCATS Motor Fuels working group, and I’ll be providing insight into the vendor and customer needs around managing fuel pricing and using fuel pricing software. The next meeting is scheduled to be held during NACSTech in New Orleans May 4-6. I’ll keep blogging to keep you up to speed regarding decisions made by this working group.
by John Keller | Jan 29, 2010 | Fuel Price Management, Fuel Pricing Technology, Retail Fuel Margins
I love my Droid phone. I use it off and on all day and I’m always looking for new reasons to use applications on it. That’s why I was pleasantly surprised this morning to see an important update to my Where application. The Where app is a location-based mobile platform that allows you to see important information about your location like local restaurants, movies, traffic and weather. I’ve been using it to lookup local gas prices. According to past press releases, Where receives gas price information from Garmin, who receives gas price information from OPIS, as well as GasBuddy.com, another OPIS partner.
The latest update this morning allows the Droid user to report an updated gas price. Think gasbuddy.com, but from a Droid-specific application. It’s yet another way for consumers to report gas prices they see on the street and feel like they’re contributing to the community.
There are well over 25,000 active accounts for Where, and recent reviews in the Android Market include:
“Everything in 1 app. It’s awesome and quick…this app should get an award.”
“Far and away the best app on the Market right now!”
The Where app is also available for the BlackBerry, Palm Pre, and iPhone.
Fuel Managers would do well to keep track of the prices that are being reported for their stores on Where. If they see an inaccurate report, an update is a simple click away.
