Retail Fuel Management issues span the globe

Retail Fuel Management issues span the globe

• Sep 30, 2013
• John Keller
• 1

A team representing PriceAdvantage just spent the week at the Insight NACS Future of Convenience industry show in London. It was an exciting time for us because for the first time we were able to show off the international capabilities of PriceAdvantage, where we can now price fuel in any country, without constraint for gallons or liters, or number of digits to the left or right of the decimal. Where previously PriceAdvantage was only able to handle prices ending in nine tenths, PriceAdvantage can now price fuel to three digits to the right of the decimal, and unlimited digits to the left of the decimal. That means from now on PriceAdvantage is a powerful solution for any country in the world. In addition to this internationalization of the product, we were able to show off the first localized version of PriceAdvantage, fully translated into French.

But this tradeshow was exciting for us in another way as well. It became clear throughout the conference that the same problems PriceAdvantage addresses for our US customers are shared with c-store fuel retailers everywhere. As one speaker put it, there are no unique problems in the c-store business around the world, just the same problems in different parts of their lifecycle. Here are three examples.

1) Retail fuel volumes continue to decline year over year. According to the Belfast Telegraph, petrol sales continue to plunge, as much as 5.8% from January to June of 2013 compared to the same period last year. That represents a decrease of 512 million liters. Diesel fuel sales increased over the same time period, but only by 270 million liters, not enough to result in a net gain. The article attributes the loss to changes in consumer behavior to cut back on their driving.

2) Grocery chains and c-store chains are in a major battle for fuel volumes. This article in the London business newspaper City A.M. reports that supermarkets are in a fuel pricing war. The article goes on to say that the supermarket chain Sainsbury’s just cut their petrol prices by 6 pence and diesel by 4 pence in a battle with Tesco and Asda.

3) Fuel profit optimization is most powerful when viewed as part of the overall gross profits of the store. In many cases, the advertised fuel price is strategically used as an advertisement to attract customers to the high margin food and store merchandise product offerings. One speaker called fuel, merchandise, and food the three pillars of c-store profitability. As retail fuel managers learn about correlations between fuel volumes and in-store profits, and how these correlations vary depending on the markets in which they compete, the fuel managers can use fuel software to optimize volumes and margins based on differing market profiles and with an eye to overall store profits across all categories.

September 2013 represents a significant milestone for PriceAdvantage as it is our launch into markets outside the US. We will continue to introduce more capabilities for our customers around the world, providing a dramatic ROI in a short time frame, by solving industry problems no matter where they may be on the fuel management timeline.