by John Keller | Apr 4, 2014 | Fuel Price Management Solutions, Fuel Price Optimization, Fuel Software, Industry News, PriceAdvantage
On page 90 of the March issue of Convenience Store News magazine, there is some interesting survey insight regarding c-store retail fuels sales, comparing 2013 to 2012:
- 40.9% of c-stores surveyed said gas price volatility caused a decrease in store traffic.
- 38.6 % said gas price volatility caused a decrease in profitability.
- 27.3% said gas price volatility caused a decrease in sales.
- 13.6% said gas price volatility caused improved margins.
- 17.3% said they had increased gallons sold per transaction.
- 32.7% said they had decreased gallons sold per transaction.
- 50% said they had the same gallons sold per transaction.
What are we to make of this? Savvy c-store chains are able to manage what they measure, and develop effective fuel pricing strategies that fit into the overall profitability of each store. That means optimizing store traffic, acknowledging cases when sales and gallons sold per transaction may be lower, but managing every penny to optimize profits, both at the forecourt and in the store.
PriceAdvantage in conjunction with PDI allows you to directly see the correlation between fuels sales and other transactions of any kind. We call this the Volume Correlation report, unveiled at NACS and released in PriceAdvantage version 2013.3. Using PDI information, you can quickly see the correlation between fuel promotions and in-store sales, number of transactions, and average transaction size by product category, overlayed on top of volumes sold and price per gallon.
How do c-stores survive in today’s volatile fuels market? The old adage “You can’t manage what you can’t measure” holds true. With PriceAdvantage c-stores manage what they measure.
by John Keller | Mar 28, 2014 | Industry News, Retail Fuel Margins
The OPIS numbers released in the NACSDaily report today show US retail fuel margins rose for the first time in two weeks with an increase of $0.025 per gallon. The average retail fuel margin across the US now stands at $0.168 per gallon. This same day last year the average retail fuel margin was $0.22 per gallon. The six week average now stands at $0.146 per gallon, up $0.004 from last week.
The March retail fuel margin average this year finished at $0.153 per gallon, compared to $0.212 in March 2013. The first quarter margin average this year finished essentially the same as last year, with an average of $0.158 per gallon in 2014 compared to $0.159 per gallon in 2013.
In 2013, the Q2 average retail fuel margin was $0.191 per gallon. Let’s hope that 2014 can repeat that margin gain so we can see a more profitable quarter.
by John Keller | Mar 27, 2014 | Industry News
In the latest issue of CSP Magazine, there is an OPIS advertorial with some frightening news from the OPIS surveys of nearly 5000 stations across the US.
- Year to date fuel volumes down an average of 4.8% through February 8
- Median fuel gallons are down 5.8% through February 8
- 68% of stores surveyed had volume declines year over year
- 35% of stores surveyed had volumes down more than 10% year over year
- Same store volumes are down 6.4% for the first six weeks compared to last year
OPIS spokesman Brian Norris attributes the lower volumes to the standard trends of more fuel-efficient vehicles and more telecommuters. But Mr. Norris also says the “horrendous weather seen in much of the country” had a significant impact.
I expect we’ll see this gloomy news reflected in the financial results of the publicly held c-store companies when it’s time to report to Wall Street. Of course it’s a rare financial analyst who understands these kinds of environmental pressures that are outside the control of the c-store chain.
No doubt these statistics point out how competitive the retail fuels business is nowadays. It certainly is not for the faint of heart. Without the proper fuel software like PriceAdvantage, it simply is not possible to compete effectively.
by John Keller | Mar 24, 2014 | Customer News
According to CSP.net, The Spinx Company has added two members to their executive leadership team. You may find the article here.
One of the new leaders is Cheryl Szczesniak, formerly Operations Controller at Spinx, promoted to CIO of the company responsible for the company’s technology infrastructure and IT project management, and now on the executive leadership team that focuses on strategy planning, policy development and workplace oversight for Spinx.
Cheryl is a longtime friend of PriceAdvantage, having been part of the PriceAdvantage rollout to all their stores in 2011, and every PriceAdvantage upgrade since. A case study of how Spinx uses PriceAdvantage may be found here. Cheryl certainly has earned her stripes because under her direction, Spinx has successfully integrated PriceAdvantage with their Gilbarco POS system, NCR Radiant POS system, OPIS Radius reports, and PDI.
We’re proud to have Spinx as a customer and partner, and to have Cheryl Szczesniak as a friend.
by John Keller | Mar 24, 2014 | Customer News, Fuel Price Management Solutions, Fuel Pricing Software, Fuel Pricing Strategy, Fuel Pricing Technology, Fuel Software, PriceAdvantage, Retail Fuel Margins
Earlier this month, CSPnet.com reported that CST Brands has identified 100 stores that are candidates for sale. You may find the article here. This is part of an ongoing effort at CST Brands to “assess its asset base and close convenience stores that are no longer core to its ongoing strategy”.
Kim Bowers, the CEO of CST Brands, said in the latest earnings call that in 2013 CST Brands closed 11 stores based on their “lower cash flow levels”. In other words, CST Brands pruned their portfolio of stores to rid the company of their bottom performers.
PriceAdvantage provides the analysis views and reports to quickly zero in on the under-performing locations by comparing store performance to target, to last year, and to other stores. Easy to read tools such as heat maps with color coded push pins show at a glance stores that are dragging down entire regions with their lower fuel volumes and fuel margins.
CST Brands, when they were under the Valero umbrella, worked closely with the PriceAdvantage team to develop precisely these sorts of views and reports so they could optimize their entire fuels business. Since rolling out PriceAdvantage across all their stores in 2012, CST Brands now reaps the benefit of this rich information in PriceAdvantage to deliver on the promise to Wall Street that CST Brands will continue to identify the stores that are the best candidates for sale, and the best candidates for the CST Brands wholesale business.
