by John Keller | Nov 19, 2014 | Customer News, Fuel Pricing Technology, Fuel Software, Industry News, Retail Fuel Margins
CST Brands announced their financial results for the quarter ending September 30, 2014. Earnings were $.90 compared to expectations of $.57.
From the report: “Motor fuel gross profit (per gallon) in the U.S. for the third quarter of 2014, after deducting credit card fees, was $0.25 compared to $0.16 in the third quarter of 2013, which was primarily caused by a declining crude oil and wholesale gasoline pricing environment combined with the Company’s fuel pricing strategy.” [bolded text from this author]
In the US stores separately, the numbers are as follows:
- Q3 retail fuel margin before credit card fees of $0.288 per gallon up from $0.203 for Q3 in 2013
- Q3 gallons per site per day of 4,921 gallons or approximately 152,000 gallons per month
- Q3 NTI stores gallons per site per day of 9,547 gallons or 295,000 gallons per month
The numbers are quite impressive, and the financial analysts are noticing. CST stock is now trading at $43.27 a share, up 23% over the past three months, and up 32% for the year.
by John Keller | Nov 18, 2014 | Customer News, Fuel Pricing Strategy, Fuel Pricing Technology, Industry News
In the November 2014 issue of CSP Magazine, Greg Parker explains how the success of Parker’s has allowed the company to achieve his extraordinary goals. You may find the article online here.
Previously, Mr. Parker had written a guest article for CSP magazine’s October 2013 issue, where he outlined what he calls a “Big, Hairy, Audacious Goal” to grow the Parker’s Company from a $500 million company to a multibillion one over the upcoming decade.
The numbers in the article are quite impressive:
- eight stores built in 10 months
- EBITDA (earnings before interest, taxes, depreciation and amortization) has increased 36.8%
- overall gas sales at Parker’s have increased by 33% over last year
- gas sales for stores open at least a year have increased by 5.9% over the previous year
- in-store sales have surged to 28% over last year
The PriceAdvantage team is proud to have Parker’s as a customer and partner. For many years, Parker’s has been an electronic gas price sign customer of Skyline Products, the parent company of PriceAdvantage. In January 2012, Parker’s completed their rollout of PriceAdvantage to all their stores. Besides using Skyline electronic gas price signs, the Parker’s fuel price management solution also includes the PriceAdvantage integration with the NCR Radiant POS and GasBuddy OpenStore. Click here to see a video interview with Jeff Bush, Director of Fuel Management at Parker’s, discuss how he uses PriceAdvantage Optimization.
by John Keller | Nov 7, 2014 | Customer News, Fuel Price Management, Fuel Pricing Technology, Fuel Software, Retail Fuel Margins
The quarterly financial report from Murphy USA, Inc. showed an increase in both retail fuel margins and volumes for the three months ended September 30, 2014.
Retail fuel margins hit $0.175 per gallon for the quarter, up from $0.148 per gallon year over year. Retail fuel volumes were up 2.7% year over year to 281,185 gallons per store per month. Combining both increases yielded a fuel margin dollar per store per month of $49,347, an increase of 2.7%.
The NACS industry research states that the average c-store sells approximately 123,000 gallons per month. That means Murphy is selling more than double the average.
Skyline Products and Murphy Oil have an exclusive license agreement for the PriceAdvantage fuel price management software. The patent is based on the PriceAdvantage software determining the price of a fuel product, sending those price changes to the store including the electronic price signs, the POS, and the pumps, and then verifying the completion of the change. This rapid closed loop fuel pricing software process is key to the Murphy Oil fuel price management success.
by John Keller | Oct 17, 2014 | Fuel Price Management, Fuel Pricing Technology, Industry News, Retail Fuel Margins
There has been so much press lately about the falling gas prices this season. Everywhere you turn, it seems, there’s another article explaining why gas prices are falling and predicting how much lower they’ll go.
The beautiful thing about falling gas prices for the fuel retailer is that margins are strongest when retail prices are falling. Nothing proves that point better than the OPIS report today. Retail fuel margins on average rose $0.076 per gallon, making it a $0.156 per gallon increase over two weeks. The average retail fuel margin across the US stands at $0.370 per gallon, the highest in two years. That increase helped the year to date retail fuel margin to rise to $0.196 and the Q4 average to hit $0.332 per gallon. The six week average is now $0.265 per gallon.
The retail fuel margin now stands $0.18 per gallon above last year at this time. Will fuel revenue numbers be impacted by these lower gas prices? Absolutely. Will fuel profits be helped by these margins? Absolutely! And that’s the number you can take to the bank, to fund investments, and to grow the business.
The way things are going, the last quarter of the year may have the strongest margins of the entire year. Of course volumes this quarter can never match the numbers of Q3 which include the peak driving season. But this quarter may be as much as $0.10 per average retail margin above the average in Q2. And that makes for a great way to finish off the year.
by John Keller | Oct 10, 2014 | Fuel Price Management, Fuel Pricing Strategy, Fuel Pricing Technology, Fuel Software, Industry News
We just finished up the NACS 2014 show, and what a show it was. It was great to meet up with so many of our customers again and learn about the latest developments in their business. For some of our customers, it provided the opportunity for us to bring them up to speed on new features of PriceAdvantage. For others, it was the opportunity to talk about where they’re headed, and our product roadmap.
We did something different this year, and invited our newest partner Fuelzee to share our booth space. That proved to be a winning move, since many folks wanted to learn more about the free competitor pricing data Fuelzee is providing to PriceAdvantage, and how PriceAdvantage is pushing prices out to the Fuelzee mobile app for consumers to see. Loyalty, rewards, and mobile payment is a hot topic in our industry now, so Fuelzee was quite busy over the three days of the show.
The Expo floor was interesting because it showed a sample of how many integrations PriceAdvantage offers. Though it’s not a complete list, it included PDI, Fuelzee, GasBuddy/OPIS, NCR Radiant, Skyline signs, Pinnacle, and Gilbarco Veeder-Root. PriceAdvantage provides the Fuel Analyst with the aggregation of information, the views needed to make quick fuel pricing decisions, and the ability to act on those decisions by executing fuel pricing strategies to the street. Our theme this year was “It’s about time”, as in “It’s about time: the faster you can determine the right price, the faster you can increase profits”; “It’s about time: the quicker you can execute your fuel pricing strategies and know for certain the right price is at every store, the quicker you can move on to other responsibilities”; “It’s about time you make money off your fuel business”.
We look forward to seeing everyone at the NACS show 2015 next time – once again in Vegas.
by John Keller | Oct 1, 2014 | Fuel Price Management, Fuel Pricing Strategy, Fuel Pricing Technology, Fuel Software, Industry News
The October issue of NACS Magazine has a great article “Weathering the Storm” discussing how weather impacts both fuel and in-store sales. Perhaps the best quote in the article is this: “As a stand-alone discipline, focusing on weather impact seems perhaps overstated, but as part of an overall retailing strategy it is essential, especially when it comes to reinforcing your brand’s value.”
The importance of incorporating weather into your fuel pricing strategy is a concept we at PriceAdvantage have embraced for a long time. It is in this vein that PriceAdvantage offers a free weather widget that not only shows current weather conditions at the store location, but a six day forecast, and a three day weather history as well. Ice storm in the forecast for Dallas? Prepare for virtually no traffic on that day. Nor’easter predicted to hit Boston this weekend? Plan on increased traffic exiting the city for home ahead of it, and increased skier traffic to the mountains after it.
Weather is a critical aspect of retail fuel pricing that makes optimization economic models on their own simply not good enough. Economic models are based on all things being equal. Introduce a random major weather event, and suddenly all things are not equal. Successful retail fuel pricing strategies must incorporate the wisdom and insight that only the fuel analyst and field intelligence can provide. That’s what we mean when we describe the “art and science” of fuel pricing.
NACS board member Chris Gheysens says in the article “It’s time to see weather as an opportunity … Understand what it does to you and solve for it going forward, coming up with different strategies.”
