by John Keller | Nov 26, 2013 | Customer News, Fuel Price Management Solutions, Industry News
According to the San Antonio Alamo City Beat, CST Brands plans to build 30 new stores in 2014. CST Brands opened 11 new stores in the past four months.
Additionally, CST Brands will ring the opening bell on Wall Street on December 3.
CST Brands has been rewarded favorably by financial analysts such as J.P. Morgan for their successful strategy of focusing on in-store margins by opening large c-stores. CST Brands has been quite successful at improving their fuel margins since being spun off from the Valero refinery parent.
CST Brands has been using PriceAdvantage as their exclusive retail fuel software since 2012.
by John Keller | Nov 25, 2013 | Customer News, Fuel Price Optimization, Fuel Pricing Software, Industry News, Retail Fuel Margins
In a recent update, J.P. Morgan announced they will begin financial coverage of CST Brands and Murphy USA. In their initial report, they make specific mention of their preference to the CST Brands strategy of focusing on higher margin in-store merchandise through larger store formats. The reason they gave was “Against a backdrop of stagnant gasoline demand and volatile fuel margins, the industry appears to be focused on growing higher-margin, in-store convenience merchandise through larger store formats. We prefer CST’s growth story, with new format stores driving margin growth over time and reducing the company’s dependence on fuel margins.”
In a blog dated November 14, 2013, I wrote about the correlation between fuel volumes an in-store sales. PriceAdvantage now allows you to select an unlimited number of product categories from an imported set of data from PDI, and run a report showing the correlation between retail fuel volumes and retail fuel prices with the selected data. That means you can see how fuel promotions impact in-store product category sales, along with the number of in-store transactions. You can even see how promotions of one in-store product category impact sales of another in-store product category, along with fuel volumes and fuel prices.
Clearly this strategic thinking is inline with what J.P. Morgan rewards. CST Brands has been a loyal PriceAdvantage customer since 2012. Does your fuel software allow you to investigate these correlations and maximize both fuel and in-store margins?
by John Keller | Nov 18, 2013 | Customer News, Fuel Price Optimization, Fuel Pricing Strategy, Fuel Pricing Technology, Fuel Software, Retail Fuel Margins
In the latest financial report from CST Brands, for the fiscal quarter ending September 30, 2013, there is an interesting note about how the company has shifted its fuel pricing strategy since the spin-off from Valero.
On page 37 of the report, there is a paragraph under the title “Motor Fuel Strategy”:
“Prior to the separation and distribution, our business existed as an outlet for our former parent’s products and the focus was on maximizing consolidated parent company profitability. Occasionally, we priced motor fuel with the overall objective of increasing motor fuel gallons sold with less emphasis on retail motor fuel gross margin. This resulted in a higher profit generated by our former parent’s refining segment, which was beneficial to their consolidated earnings performance. As a separate company, we generally manage our motor fuel pricing to maximize motor fuel gross margin. This strategy, from time to time, may result in different motor fuel gallons sold from historical levels as a result of our being separated from our former parent company.”
The change in the CST Brands motor fuel strategy is evident in these numbers:
Fuel volumes, in gallons per site per day: 5,003 in Q3 2013 vs. 5,131 in Q3 2012
Fuel margins, in cents per gallon before credit card fees: $0.20 in Q3 2013 vs. $0.13 in Q3 2012
Unlike with other c-store chains which announce changes in fuel pricing strategies and then deliver results that conflict with their goals, CST Brands delivered results completely in line with their new mission as a new company.
From a fuel price management perspective, corporate fuel strategies will change in emphasis from time to time. CST Brands has been successfully using PriceAdvantage as their exclusive fuel pricing software for all their company owned stores since 2012, first under the Valero parent which had one retail fuel objective focused on volumes, now as their own CST Brands entity with the new fuel objective focused on price and margin optimization.
As one of our customers told me after I congratulated him on the strong quarterly results of his company, “A great product yields great results.”
Do you have the fuel pricing software that allows you to deliver great results no matter what corporate objective, like CST Brands does?
by John Keller | Nov 5, 2013 | Customer News, Fuel Price Optimization, Fuel Pricing Strategy, PriceAdvantage, Retail Fuel Margins
In the second quarterly financial report since spinning off from Valero, CST Brands reported a successful quarter of effectively implementing fuel pricing strategies that balanced fuel margins and fuel volumes. These strategies varied according to the market profile of the store and the corporate goals of that store, offering an ideal model of how to manage retail fuel pricing right.
Kim Bowers, CEO of CST Brands, explained that in this quarter CST brands used a fuel strategy that sacrificed fuel margins to build volume and traffic at their new stores (categorized as NTI, or New To Industry stores). CST Brands used an opposite fuel pricing strategy for their established stores to optimize margins, without the concern of potentially sacrificing fuel volumes. This is where the retail fuel pricing strategy gets even more interesting: this fuel margin optimization strategy at established stores did not seem to have an effect on in-store merchandise sales. That means CST Brands is earning more overall profits at these stores, which of course is the ultimate measure of success.
Kim Bowers said in the analyst call “At our new stores, we look at balance, pushing volume from time to time to generate traffic. For our legacy stores, we have to strike a balance between margin and volume. We need both. At those stores, we’re more focused on that optimal balance. It’s a corner-by corner-analysis.”
Under the Valero name, CST Brands selected PriceAdvantage as their sole retail fuel pricing software for all their stores in 2011. They completed the full implementation in 2012. The PriceAdvantage implementation is a complete closed loop process that includes OPIS Radius Reports for competitor surveys and competitive analysis, PDI volume and cost information for performance analysis, PriceAdvantage Optimization for retail pricing guidance, VeriFone POS and Skyline electronic price signs for seamless price change execution, and retail fuel price publishing to the web via GasBuddy OpenStore.
The PriceAdvantage team is proud to have CST Brands as a strong partner and customer and to share in our mutual success.
by John Keller | Oct 30, 2013 | Customer News, Fuel Price Management Solutions
The PriceAdvantage team would like to congratulate Parker’s on the grand opening of their 32nd store.
According to Convenience Store News, Parker’s celebrated the official grand opening of their new state-of-the-art location in Statesboro, Georgia. The 3,200-square-foot retail store is the third Parker’s location in Bulloch County.
Parker’s features its 1-Cent Wednesday Fueling the Community program at the Statesboro location. On the first Wednesday of every month, Parker’s sets aside one cent of every gallon of gas purchased to donate back to local schools.
Parker’s has been using PriceAdvantage for retail fuel pricing across all their stores since November 2011. Parker’s has added seven stores since then. The Parker’s PriceAdvantage implementation incorporates their Skyline electronic price signs, as well as their VeriFone POS system, PDI back office system, and GasBuddy OpenStore.
by John Keller | Oct 28, 2013 | Customer News, Fuel Price Management, Fuel Pricing Technology
Greg Parker can now add “Entrepreneur of the Year” to his growing list of awards and industry recognitions. The Savannah Area Chamber of Commerce has just named Mr. Parker the 2013 Entrepreneur of the Year. The Griffin Report named Greg Parker C-store Innovator of the Year earlier this year. Convenience Store News named him the 2013 Tech Executive of the year in April. In August this year Parker’s was named one of the fastest growing companies by Inc. Magazine. Greg is the President and CEO of The Parker Companies, and a loyal PriceAdvantage partner and customer.
Parker’s selected PriceAdvantage as their enterprise fuel software in November 2011. Since then, Parker’s has successfully been using PriceAdvantage in conjunction with PDI, VeriFone, and GasBuddy OpenStore to manage their entire retail fuel pricing lifecycle. “We are always looking for innovative solutions to increase our efficiencies in the store, allowing our store employees to focus on customers and enhancing their shopping experience,” Greg Parker said. “PriceAdvantage Enterprise does exactly that by giving us control over fuel pricing from headquarters, or from the field, streamlining our overall fuel pricing process, helping to maximize profits and grow our business. Parker’s stores strive to be recognized for quality products at competitive prices and now we can communicate our fuel prices faster and easier in a matter of minutes through PriceAdvantage and OpenStore, both at the store and online,” Mr. Parker said.
The PriceAdvantage team is proud to work closely with Greg Parker and The Parker Companies as each of us plays a key role in our mutual success.
