by John Keller | Nov 23, 2011 | Fuel Price Management, Retail Fuel Margins
The latest MasterCard Spending Pulse survey reported retail fuel sales down 4.5% compared to the same period last year for the week ending November 18.
Holiday travel for this year is predicted to be higher than last year, but not enough to turn around the trend. Experts cite the causes as being high unemployment and low wages.
From a fuel price management perspective, this survey indicates the ongoing trend of fuels retailers chasing fewer fuel gallons, making the environment even more competitive and with less room for error. Convenience stores without the most advanced fuel price management solutions will find it increasingly difficult to effectively compete in these market conditions.
by John Keller | Nov 17, 2011 | Customer News, Fuel Price Management, Fuel Price Management Solutions
Stan Sheetz, the CEO of Sheetz Inc., said in a Fox TV interview that Sheetz will be opening 100 new stores in North Carolina over the next 8 years. Sheetz has previously announced that North Carolina and West Virginia are its top markets for expansion.
Mr. Sheetz also said in the interview that when a new store opens, they open with a “very, very aggressive” fuel price. State laws in North Carolina allow for stores to have fuel prices below cost for the first 10 days of opening. Mr. Sheetz said “…when a store opens, Sheetz drops the price below cost, resulting in long lines and a lot of buzz.”
Sheetz has a strong partnership with Skyline Products for both electronic price signs and PriceAdvantage fuel pricing software. Sheetz uses this synergy to quickly adjust fuel prices at the electronic price sign, POS and pump. This round trip fuels pricing solution allows Sheetz to reach peak operational efficiency with their fuels price management.
From a fuels price management perspective, Sheetz competitors in North Carolina can expect aggressive fuel prices, especially aggressive during the first 10 days after opening a new store when Sheetz will likely price their fuel below cost.
by John Keller | Nov 16, 2011 | Fuel Price Management Solutions, Industry News, PriceAdvantage
PriceAdvantage, a division of Skyline Products, announced today that CEFCO Convenience Stores has added 71 sites to its ongoing partnership. The new sites will be implementing PriceAdvantage, a fuel price management solution that has proven to be invaluable to CEFCO, across its network. The new sites are in Texas, Louisiana, Arkansas, and Mississippi.
“PriceAdvantage has increased our efficiency across the fuel pricing process but most significantly in the time it takes us to price our 194 sites”, says Brett Giesick, Chief Retail Officer of CEFCO Convenience Stores. “We have found that it takes us only 1-2 hours to complete price changes across the network, including updates to the POS, pump and electronic price signs. So naturally it was an easy decision to include the additional new sites in our partnership with Skyline.”
Aaron McHugh, Head of PriceAdvantage division, adds “We are elated that CEFCO has seen such an improvement in their fuel pricing process with PriceAdvantage, and we’re excited to be a part of their success.”
PriceAdvantage is a highly specialized retail fuel pricing solution for the Convenience Store industry, designed to increase the efficiency and effectiveness of a retailer’s pricing process. PriceAdvantage provides automation for the entire fuel pricing process, from collection of competitive surveys, to efficient and detailed analysis for best price determination, to rapid speed-to-the-street price change execution. The ability to change prices immediately at the POS, fuel pumps and electronic price signs from the centralized headquarters location with one click makes the solution unique in the industry.
by John Keller | Nov 16, 2011 | Fuel Price Management, Fuel Pricing Strategy, Retail Fuel Margins
The Bespoke Investment Group issued a statement saying that despite crude prices topping $100 a barrel today, retail fuels prices are not likely to rise in response. That’s because Bespoke says retail fuels prices have been responding much more closely to changes in Brent crude, than with WTI. And Brent crude has not gone up in price.
“As long as Brent crude continues to underperform WTI crude, rising oil prices will be less of a drag on US consumers than they have typically been in the past,” Bespoke wrote.
From a fuels price management perspective, this is important because fuel analysts may choose to stop tracking WTI prices, and instead focus on the performance of Brent crude, when anticipating future price moves.
by John Keller | Nov 9, 2011 | Fuel Price Management, Fuel Pricing Strategy, Industry News
In Spartanburg, SC, another fuel price war was initiated by a c-store grand opening. Promotional temporary fuel prices for a new QuikTrip caused a race to the fuel price basement. In response to the promotional pricing, the nearby Raceway and Kangaroo lowered their fuel prices, resulting in some of the lowest prices in the country, with unleaded fuel at one point hitting bottom at $2.80 per gallon. That was enough to cause unnatural traffic patterns to the point where state officials needed to be called in to solve the traffic problem.
This price war started over a month ago back in October, and still has a ripple effect in Spartanburg. GasBuddy reports as of today seven c-stores with unleaded fuel priced below $3.00 per gallon, with two stores at $2.83. The remaining 44 c-stores in Spartanburg are priced anywhere from $3.00/gallon to $3.35/gallon.
From a fuel price management perspective, it’s another lesson learned there is no substitute for fuel pricing analysts keeping up with local field market intelligence, and using human insight when setting optimized fuel prices. The retail fuel price market has too many unexpected influences that drive prices out of traditional patterns.
by John Keller | Nov 8, 2011 | Fuel Price Management, Retail Fuel Margins
Retail fuels prices are expected to decline through the rest of 2011, according to today’s Short-Term Energy Outlook report from the US Energy Information Administration.
So far this year, regular unleaded monthly average gas prices have dropped $.46/gallon from their highest point in 2011 back in May, when the average fuel price for that month was $3.91 per gallon. The US monthly average fuel price for regular unleaded in October was $3.45 per gallon.
If the US EIA prediction proves to be true, from a fuels price management perspective these last 7 months of the year offer opportunities for fuel price optimization that will increase fuel margins and increased fuels profitability.
