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.
by John Keller | Apr 11, 2013 | Fuel Price Management, Industry News
Kroger announced they will increase their number of electric vehicle charging stations, in partnership with ECOtality, Inc. This expansion project will bring the total number of Kroger EV charging stations to almost 300. Kroger already operates 60 EV charging stations in Oregon and Washington, and 14 EV charging stations in Texas. The announced expansion will bring Kroger EV stations to Phoenix, San Diego and Los Angeles.
The 225 new charging stations include 200 level 2 (quick charge) stations, and 25 DC Fast Chargers. DC Fast Chargers enable customers to charge an electric vehicle battery up to 80 percent capacity in less than 30 minutes. ECOtality has 144 DC Fast Chargers across the US.
This Kroger partnership is one of ECOtality’s largest in terms of single retail company station networks. Earlier this year ECOtality announced an expanded partnership with Sears, where 17 additional charging stations were added.
ECOtality has over 3300 combined public and private charging stations throughout the US, including over 800 in California, 750 in Oregon, and 670 in Tennessee.
The number of gasoline stations stands at 160,000 and thus still dwarfs the total number of EV charging stations. Nonetheless, fuel analysts would be wise to keep a watchful eye on their markets and anticipate when it may make sense to add electricity to their product portfolio. Spinx store #149 at 1619 Decker Blvd in Columbia SC is an example of a c-store that has added an EV charging station to its location.
by John Keller | Apr 10, 2013 | Customer News, Fuel Price Management Solutions, Fuel Pricing Technology, Industry News
Congratulations to Greg Parker for winning the Convenience Store News Top Tech Executive award. The PriceAdvantage team is proud to have Greg Parker, CEO, and all the staff of Parker Companies as a business partner.
Parker’s has been using PriceAdvantage as their fuel pricing software system since 2011. Soon after implementing PriceAdvantage with the VeriFone POS systems and Skyline electronic price signs at all their stores, Parker’s extended the implementation to GasBuddy OpenStore.
The Parker Companies implementation of PriceAdvantage was listed by Convenience Store News as one of the reasons why Greg Parker won the award. And that makes sense, as this implementation includes all four quadrants of the fuel price management process including:
- collection of cost information from PDI and competitor survey prices from store managers
- rich analytics in PriceAdvantage reports and analysis views
- price changes to the store signs, POS and pumps, and GasBuddy
- confirmation from PriceAdvantage that all price changes have completed
We in the PriceAdvantage division of Skyline Products appreciate the opportunity to work with Greg Parker and the Parker Companies, and we look forward to a long time partnership for years to come.
by John Keller | Apr 10, 2013 | Fuel Price Management, Fuel Pricing Software, Industry News, Retail Fuel Margins
Before releasing their complete “NACS State of the Industry Report of 2012 Data”, the National Association of Convenience Stores released some key c-store metrics for the US 2012 calendar year. Fuel price management statistics follow:
- Motor fuels sales increased 2.9% to a record $501.0 billion. Obviously this is related to the price of fuel throughout the year, but it is an interesting statistic to consider when comparing 2012 c-store corporate financial reports, and calculating market share across c-store chains.
- First quarter 2012 sales and profits were the best of any other quarter, while fourth quarter sales and profits were the worst. This is another interesting statistic to consider when reviewing c-store corporate financial reports, and the numbers showing comparisons to the previous quarter and prior year.
- Motor fuels sales accounted for 71.5% of total sales. That means once again, fuel price management addressed the largest product category by far in terms of revenue dollars.
- Motor fuels accounted for 35% of profit. From a fuel price management perspective, that means fuel price management is a discipline that requires watchful care because profits are relatively slim compared to other product categories.
- Motor fuels gross margins for the year were $0.178 per gallon before expenses, compared to $0.182 per gallon in 2011. These figures are yet another indicator of the increased competitive pressure in the fuel price management environment as c-stores compete for decreasing fuels volumes and margins shrink.
- Credit and debit card fees added 5.1 cents to every gallon of gasoline sold at convenience stores in 2012. That means we can immediately drop the 2012 margins to $0.127 before other expenses that could be an additional $0.07 per gallon. This means fuel analysts are frequently working with overall net fuel margins for the year in the neighborhood of $0.05 per gallon.
Only with a robust fuel pricing software system can fuel analysts optimize profits in the largest c-store product category, when the environment continues to be such a challenge.
by John Keller | Apr 8, 2013 | Fuel Price Management, Fuel Price Optimization, Fuel Pricing Strategy, Retail Fuel Margins
The retail fuel price management game is one of balancing volumes and margins. As we watch the retail fuels volume market size shrink, or at best remain steady year over year, competition for that shrinking pie continues to intensify. If you’re not careful, the race for volume market share can be a race to the bottom for retail prices, and profits.
According to a report from the National Association of Convenience Stores, the average fuel retailer breakeven point is 12 cents per gallon, taking into consideration store operating expenses, amortization of equipment, inventory shrink, and credit card fees. So when we see the average Q1 retail fuel margins for 2013 are at $0.159 per gallon, that means fuel retailers are making very little net profit from fuel sales.
How do savvy retail fuel analysts optimize volumes and margins? By focusing on the margins of the commodities other than unleaded, like mid-grade, premium, and diesel. They analyze the strength of their product offering compared to the competition, and identify stores of opportunity where they may have exclusivity. They may discover “mid-grade stores” that can tap into that market because the competition doesn’t offer mid-grade. Or there may be “diesel stores” that have a superior offering because of pump layout and ease of access.
PriceAdvantage aids with this optimization and analysis by providing easy to use views and reports showing product volume sales, profits, margins, and competitor product offerings, by commodity. And in order to make sure you are optimizing the pricing spreads between commodities, PriceAdvantage offers a built-in cost report showing the replacement cost differential between commodities, listed by supplier.
As the fuel price management landscape continues to be more competitive, only fuel pricing software like PriceAdvantage provides the rich optimization analytics to make the best pricing decisions that lead to maximum profits.
by John Keller | Apr 5, 2013 | Customer News, Fuel Price Management Solutions, Industry News
Convenience Store News released their list of the “Top 20 Growth Chains” and three PriceAdvantage customers made the list.
Fikes Wholesale, the parent company of CEFCO Convenience Stores, made the list for the second straight time. They improved on their 10th place ranking in 2012 to a fifth place ranking in 2013. CEFCO added 61 new stores last year, a 31% increase year over year, bringing their total count to 255 stores as of December 2012. CEFCO has been using PriceAdvantage as their complete fuel price management solution for over three years.
Valero Corner Stores has also made the list for two straight years, ranking eighth in both 2012 and in 2013. In 2013, Valero Corner Stores added 34 stores, bringing their total company owned store count in the US to 1030 as of December 2012. Valero rolled out PriceAdvantage to all their stores in 2012.
Sheetz is another repeat c-store chain on the list with a 2013 ranking of 12th, an improvement from their ranking of 17th in 2012. Sheetz added 23 stores last year, bringing their total store count to 434 as of December 2012. Sheetz has been using PriceAdvantage for their fuel pricing since 2009.
The PriceAdvantage team is proud to have such strong partnerships with CEFCO, Valero, and Sheetz, and we are proud to share in their success.
