by John Keller | Oct 17, 2014 | Fuel Price Management, Fuel Pricing Technology, Industry News, Retail Fuel Margins
There has been so much press lately about the falling gas prices this season. Everywhere you turn, it seems, there’s another article explaining why gas prices are falling and predicting how much lower they’ll go.
The beautiful thing about falling gas prices for the fuel retailer is that margins are strongest when retail prices are falling. Nothing proves that point better than the OPIS report today. Retail fuel margins on average rose $0.076 per gallon, making it a $0.156 per gallon increase over two weeks. The average retail fuel margin across the US stands at $0.370 per gallon, the highest in two years. That increase helped the year to date retail fuel margin to rise to $0.196 and the Q4 average to hit $0.332 per gallon. The six week average is now $0.265 per gallon.
The retail fuel margin now stands $0.18 per gallon above last year at this time. Will fuel revenue numbers be impacted by these lower gas prices? Absolutely. Will fuel profits be helped by these margins? Absolutely! And that’s the number you can take to the bank, to fund investments, and to grow the business.
The way things are going, the last quarter of the year may have the strongest margins of the entire year. Of course volumes this quarter can never match the numbers of Q3 which include the peak driving season. But this quarter may be as much as $0.10 per average retail margin above the average in Q2. And that makes for a great way to finish off the year.
by John Keller | Oct 10, 2014 | Fuel Price Management, Industry News, Retail Fuel Margins
The OPIS report today revealed that the average retail fuel margin across the US had the largest weekly jump since January of this year. The average retail fuel margin increased $0.08 per gallon to $0.294 per gallon, the highest margin of 2014. The year to date average continued its gentle climb upward to $0.192 per gallon, the highest year to date average of this year. The six week average continued strong at $0.236 per gallon.
Last year at this time the average retail fuel margin was $0.236 per gallon, meaning we’re currently up $0.058 per gallon over last year.
As we approach the final 12 weeks of the year, it’s interesting to try to make predictions for how the year will end. When 2013 was done, the overall retail fuel margin finished at $0.190 per gallon. It took us until October to achieve that margin level, starting 2014 off at $0.112 per gallon, and clawing our way up to today. Last year the final weeks of the year had some up and down margin averages, but overall the weeks lost margin more often than they gained. Hopefully this year we can hold on to this margin level and maintain the $0.19 year to date average, and the six week average margins of $0.20 that we’ve been seeing since July.
by John Keller | Oct 10, 2014 | Fuel Price Management, Fuel Pricing Strategy, Fuel Pricing Technology, Fuel Software, Industry News
We just finished up the NACS 2014 show, and what a show it was. It was great to meet up with so many of our customers again and learn about the latest developments in their business. For some of our customers, it provided the opportunity for us to bring them up to speed on new features of PriceAdvantage. For others, it was the opportunity to talk about where they’re headed, and our product roadmap.
We did something different this year, and invited our newest partner Fuelzee to share our booth space. That proved to be a winning move, since many folks wanted to learn more about the free competitor pricing data Fuelzee is providing to PriceAdvantage, and how PriceAdvantage is pushing prices out to the Fuelzee mobile app for consumers to see. Loyalty, rewards, and mobile payment is a hot topic in our industry now, so Fuelzee was quite busy over the three days of the show.
The Expo floor was interesting because it showed a sample of how many integrations PriceAdvantage offers. Though it’s not a complete list, it included PDI, Fuelzee, GasBuddy/OPIS, NCR Radiant, Skyline signs, Pinnacle, and Gilbarco Veeder-Root. PriceAdvantage provides the Fuel Analyst with the aggregation of information, the views needed to make quick fuel pricing decisions, and the ability to act on those decisions by executing fuel pricing strategies to the street. Our theme this year was “It’s about time”, as in “It’s about time: the faster you can determine the right price, the faster you can increase profits”; “It’s about time: the quicker you can execute your fuel pricing strategies and know for certain the right price is at every store, the quicker you can move on to other responsibilities”; “It’s about time you make money off your fuel business”.
We look forward to seeing everyone at the NACS show 2015 next time – once again in Vegas.
by John Keller | Oct 3, 2014 | Fuel Price Management, Fuel Pricing Strategy, Industry News, PriceAdvantage, Retail Fuel Margins
The OPIS report today revealed the average retail fuel margin across the US dropped again this week, down $0.027 to $0.214 per gallon. The equivalent day in 2013 we had an average of $0.255. That makes the second consecutive week where retail fuel margins are lower than last year.
The year to date average is a solid $0.190 per gallon, and the six week average is $0.222 per gallon. The Q4 average in 2013 ended at $0.200 per gallon, so we’re starting the quarter above that number. However, 2013 began the fourth quarter at $0.255 so it lost $0.05 over the three month period. Let’s hope we can hold margins steady this year.
by John Keller | Oct 1, 2014 | Fuel Price Management, Industry News, Retail Fuel Margins
TravelCenters of America announced their second quarter financial results with the following highlights:
1) fuel gross margin was up $0.02 per gallon year over year from $0.172 to $0.192 per gallon
2) total gallons sold was down 4 million gallons to 517 million gallons of fuel
Lower fuel volumes were blamed on conservation efforts on the part of professional drivers and TA’s decision to avoid selling fuels that bring in lower margins. Additionally, TA warned that their customers continue to have improved fuel efficiency.
These results seem to be consistent with industry trends – fuel volumes continue downward, and the margins for this past quarter were quite strong. It will be interesting to compare these results to others in the industry as the coming weeks unfold.
