by Grant Garrison | May 2, 2013 | Fuel Price Management, Fuel Price Optimization, Fuel Pricing Software, Fuel Pricing Strategy, Fuel Pricing Technology
Speed is one of the key components of pricing optimization, as reacting to market changes faster than competitors will always keep retail fuels managers ahead of the game. Tracking the pricing strategy of all local competition enables chains to meet consumer demand with greater accuracy and efficiency. The days of sending a rep to drive around and check the prices at other stations are long gone. Now, the best possible method of ensuring pricing optimization is with application of a fuel pricing software solution.
Software offers many benefits which are unavailable with traditional fuel price analysis. Trying to track price changes via a self-developed system leads to headaches and aggravation for everyone involved. No department can be expected to become the go-to source for fuel pricing information. Tracking and recording all the changing data with in-house tools will gradually increase in complexity until it builds to total chaos. Instead of that, software pricing integration tools provide a one-stop hub where managers can access the data they need and apply it to their pricing strategy.
In order to effectively track competitor price changes, companies should obtain access to data provided by a resource such as the OPIS Radius Report. This real-time information service can gather retail fuels prices for all competitor stations within a region. Be it a 2-mile, 5-mile, or 10-mile radius, managers can use these tools to track fuel prices history in their operating environment and respond to price changes without ever leaving headquarters. It’s easier and more intelligent than it’s ever been to monitor the competition, understand their pricing strategy, and beat them to the market.
Price tracking technology has completely changed the way in which we size up the competition in the retail fuels market. Pricing reports can now be integrated with software such as PriceAdvantage to pull content directly from the report and present the data in an easily understandable interface. Making intelligent pricing decisions is no longer a complex, labor intensive task, but an effortless one. Managers can now maximize their pricing optimization by gathering the data online, porting it into comprehensive software solutions, and then instantly push any price changes to the street.
This capability to instantly visualize competitor behavior gives even non tech-savvy managers an edge in their market. It gives them the tools to react to trends and market shifts before the competition even knows what they’re doing. By the time other regional chains utilizing outdated software can react to these new conditions, the company with the right tools can be leapfrogging them to the next trend.
Don’t settle for substandard systems or business processes. Technology has made it easier than ever before to define strategy and outmaneuver competitors. Stop chasing prices and make the competition start chasing you!
by John Keller | Apr 30, 2013 | Customer News, Fuel Price Management Solutions, Industry News
Today Valero announced financial results for Q1 of this year, and it exceeded Wall Street expectations. From a fuel price management perspective, we’ll focus here on the retail division, now known as the company CST Brands.
The US Division of CST Brands had an operating income increase from $11 million in the first quarter of 2012 to $18 million in the first quarter of 2013, mainly due to higher fuel margins. Fuel margins per gallon increased from $.05 per gallon in 2012 to $0.08 per gallon in 2013. The gallons per day per site measurement held steady year over year, up slightly from 5,046 gallons per day per site in 2012 to 5,048 gallons per day per site in 2013.
The US Division of CST Brands has been using PriceAdvantage as their fuel price management system for all their retail stores since the fall of 2012. The average number of company-operated fuel sites for the quarter was 1033.
The Canadian division of CST Brands does not use PriceAdvantage as their fuel price management system. Fuel margins in Canada were the same year over year at $0.26 per gallon, but the total fuel volumes were down from 3.097 million gallons per day in 2012 to 2.987 gallons per day in 2013.
by John Keller | Apr 18, 2013 | Fuel Price Management, Industry News
The Pennsylvania state house passed three natural gas tax credit programs, and sent them to the state senate for review. If passed, Pennsylvania will provide financial help for companies to convert approximately 1000 fleet vehicles to natural gas. In addition, the program provides $5m for building 10 natural gas refueling stations in high traffic corridors. The program also provides incentives to purchase heavy duty vehicles that run on natural gas.
It is too early to know for sure if the Pennsylvania state senate will also pass the program, but if it does, Pennsylvania would be one more state acknowledging the importance of natural gas as an alternative fuel. And from a fuel price management standpoint, c-stores in the state like Rutter’s, Royal Farms, and Sheetz would be wise to start planning for a time when natural gas becomes part of their fuels product portfolio so they take advantage of the new opportunity natural gas customers provide.
by John Keller | Apr 16, 2013 | Fuel Price Management, Fuel Pricing Strategy, Industry News
In anticipation of growth in the emerging liquid natural gas market, TravelCenters of America announced an agreement with Shell where TA will provide LNG truck stations at up to 100 locations along US interstate highways.
These natural gas stations will be specifically for large over the road trucks. Shell will construct at least two natural gas fueling lanes at each location and bear the burden of the cost at each location. Shell will then provide the natural gas at each location. Both Shell and TA will market the natural gas fuel to their customers.
The two companies are hopeful that the first locations may be operational within one year’s time.
From a fuel price management perspective, this is another market indicator that natural gas, specifically LNG for large trucks, may soon be taking away noticeable market share from traditional fuels volumes. According to the US Department of Energy Alternative Fueling Station Indicator, there are approximately 28 public LNG stations in the US currently.
by John Keller | Apr 12, 2013 | Fuel Price Management, Fuel Price Optimization, Industry News, Retail Fuel Margins
According to the latest OPIS report, retail fuels margins across the US had their largest weekly increase in over a month. The average retail margin today stands at $0.268 per gallon, an increase of $0.093 per gallon over last week. The last time margins were at this level was November 9, 2012.
Fuel margins averaged $0.159 per gallon for the entire Q1 of 2013. It is still early in Q2, but fuel margins are off to a good start with an average so far of $0.222 per gallon. For the past six weeks, retail fuel margins have averaged $0.223 per gallon.
This is only the second time this year when the retail fuel margin weekly increase was over $0.09 per gallon.
by John Keller | Apr 12, 2013 | Fuel Price Management Solutions, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
In the NACS State of the Industry Summit, OPIS Chief Oil Analyst Tom Kloza predicted wide and volatile fuel price swings in 2013. Mr. Kloza said smart fuel marketers will be able to take advantage of these cost swings by buying low and selling high.
The PriceAdvantage fuel pricing software solution from Skyline Products can play an important role in aiding with the timing of these buying decisions. The Daily Rack Cost Summary report in PriceAdvantage displays supplier cost provided by OPIS, making it easy for fuel analysts to review different supplier options for a rolling five day period, and compare to what the competition is paying. Not only does this report aid in deciding where to buy from, it also shows the fuel analyst whether he is at a competitive advantage or disadvantage in each of his markets. By consolidating this OPIS information feed into the PriceAdvantage fuel price management solution, fuel analysts can find answers to their critical pricing decisions in one centralized location, and reduce time to conclusion.
The Profit Actual Cost report in PriceAdvantage allows the fuel analyst to quickly see in-ground margins based on past purchases. When taken in conjunction with the replacement cost information presented in the PriceAdvantage fuel pricing screens, the fuel analyst has a complete picture of store performance and margins.
The Margin Analysis views in PriceAdvantage present by market and by store the weighted actual margin, weighted actual cost, and average replacement margin. These views make it easy to slice and dice the information by commodity, market, and date range. Heat maps display relative performance of regions to one another, and stores to each other.
PriceAdvantage provides the complete breadth of information and rich analysis you need to quickly make the most of your fuel buying and fuel pricing opportunities and to optimize the balance between margins and volumes. We can expect the volatility of 2013 to continue for years to come, so savvy fuel analysts will need to decide not if they should embrace the best fuel price management solution, but when.
