by John Keller | Jul 29, 2014 | Fuel Price Management, Fuel Price Optimization, Fuel Pricing Strategy, Fuel Software, Industry News
For a while now we’ve been tracking the growth of the Diesel fuel market from the fuel demand perspective and the number of Diesel vehicles on the road.
CSP.net published an excellent article here discussing the opportunity for fuel retailers to take advantage of the growing Diesel market. While the current market share of Diesel vehicles is only about 1% of the U.S. vehicle market, or 3% when expanded to include vans and light-duty trucks, the Diesel Technology Forum reports the number of diesel registrations has increased 30% since 2010.
A big reason for this is that auto manufacturers are turning to Diesel to help them hit their CAFE target of 36.5 mpg for cars in 2016. Diesel provides roughly 30% better fuel mileage than gasoline, and it has a far superior infrastructure and consumer familiarity than electric or hydrogen vehicles.
From the fuel manager perspective, this makes for a compelling case to consider adding Diesel to the product portfolio in markets where it has the best growth opportunity. In areas where the competition isn’t yet carrying Diesel, providing Diesel as a portfolio differentiator may be one way to help bring up overall fuel margins. Have your field managers keep an eye on the vehicle demographics in their regions, both on the road and in the dealerships, to see if Diesel models are becoming more popular. Test the most promising markets and then strike in those areas where the iron is hot. You may find that your fuel volumes are shifting from gasoline to Diesel, with a net result of increased fuel volumes, and fuel margins, overall.
by John Keller | Jul 23, 2014 | Customer News, Fuel Price Management, Fuel Pricing Strategy, Fuel Pricing Technology, Fuel Software, Industry News, Retail Fuel Margins
According to an online article on the Barron’s site today, “CST Brands, one of the largest (c-store) operators, could ring up impressive gains for investors….Damian Witkowski, an analyst at Gabelli & Co., puts the private market value of the shares at $48. That’s nearly 50% higher than Tuesday’s close of $32.94. While that valuation gap might not close right away, in the next year the stock could jump 20% as earnings improve.”
Why is this analyst so bullish on CST Brands? Because of how well CST is managing the balance between fuel margins and volumes. “Since its spinoff from Valero ( VLO ) in May 2013, CST has been boosting fuel margins and opening new larger format stores under its Corner Store moniker…CST has been seeing success from its strategy. As an independent retailer of fuel, CST has been able to focus on improving fuel margins, rather than selling more fuel, as it had when it was part of Valero. In the March quarter, margins jumped 19% to 10 cents per gallon, from the same period a year ago.”
To what can we attribute this fuel price management success? PriceAdvantage, which CST Brands began implementing in July 2012, finishing the rollout by the end of that year. In the latest earnings report, retail fuel margins before credit card fees were$0.139 per gallon, up from $0.116 per gallon for the same period in 2013. Though volumes were down year over year, something easily attributed to the overall decline of fuel volumes in the industry, I wrote a blog article about the success CST Brands is seeing as they manage the balance between fuel margins and volumes.
The fuel team at CST Brands is a great partner of Skyline Products, both on the PriceAdvantage side and the Electronic Price Sign side. The CST Brands fuel team has worked closely with the PriceAdvantage team to help us develop the best-in-industry volume, margin, commodity, and competitor analysis interfaces. The benefit to the rest of the industry is that these interfaces are provided as part of the standard set of analysis views available with PriceAdvantage. These views are not custom one-offs that cause problems with future software upgrades – they are standard out-of-the-box features that pose no grief with upgrades.
We’re proud to work so closely with CST Brands, and look forward to including their ongoing wisdom and insight in future versions of the PriceAdvantage software.
by John Keller | Jun 13, 2014 | Fuel Price Optimization, Fuel Software, Industry News, Retail Fuel Margins
Today’s OPIS report reveals that the average US retail fuel margin increased for the second consecutive week, this time rising $0.025 per gallon to an average of $0.196 per gallon. That raised the year to date retail fuel margin average to $0.164 and the Q2 average to $0.171 per gallon.
For the seventh consecutive week, the six week average increased, this time up $0.007 to hit $0.197 per gallon.
Last year at this time, the average retail fuel margin across the US was $0.152 per gallon. That means after being below last year for two weeks, this year’s average retail fuel margin is back above last year, a position we’ve held this year four times over the past six weeks.
Last year at this time, the average retail fuel margin had three consecutive weeks of increases, capping at a whopping $0.302 per gallon reported on July 5. With the political unrest in Iraq having an impact on the Brent Crude and WTI levels, where they are now trading at the highest levels of the year, it may prove difficult to reach the margin heights we attained last year.
by John Keller | Jun 11, 2014 | Fuel Price Management Solutions, Fuel Pricing Software, Fuel Pricing Technology, Fuel Software, Industry News
Shell Oil Company has added the NCR Radiant POS (RPOS) as a new option for Shell Branded Wholesalers. Shell retailers can now opt for a complete software, hardware and services solution from NCR to reduce costs and enhance customer service.
Shell branded wholesalers not only have a new choice to handle the everyday transactions inside the store and at the fuel pump, but also handle the demands of complex food service operations.
“Consumers have a variety of choices today when it comes to fueling and convenience,” said Eric Stecker, vice president and general manager, Petroleum and Convenience, NCR Retail. “We can now offer Shell branded wholesalers the RPOS solution, allowing them to add mobile, tablet, cloud, and food service solutions that can dramatically reduce wait times, increase customer satisfaction and increase efficiency of operations. NCR looks forward to helping Shell create an improved customer experience – one that separates their service from competitors.”
This is exciting news for PriceAdvantage because NCR Radiant has been a strong integration partner for many years. PriceAdvantage customers including Sheetz, Rutter’s, and Royal Farms have been executing their PriceAdvantage retail fuel price changes through the Radiant POS since 2007 with full confirmation feedback. Now that Shell Oil has added NCR Radiant to their list of available POS systems, we look forward to offering our solution to every Shell fuel retailer.
by John Keller | May 16, 2014 | Fuel Pricing Strategy, Fuel Software, Industry News, Retail Fuel Margins
The OPIS report today showed the average retail fuel margin across the US improved for the fourth straight week, rising $0.037 per gallon to $0.248 per gallon.
The year to date average broke $0.16 per gallon for the first time since March 7, rising $0.005 to reach $0.161 per gallon. The quarter to date average broke $0.16 per gallon for the first time this quarter, hitting $0.166 per gallon. The six week average now sits at $0.168 per gallon, the highest level since February 21 of this year.
This week last year, the retail fuel margin average was $0.123 per gallon, a level where it remained the following week. That means the average retail fuel margin is now twice that of last year.
These are good times for the fuel retailer, where margins are gaining strength heading into Memorial Day weekend with its historical increase of volumes. But that doesn’t mean the fuel analyst can rest easy. There are still pennies to be gained and lost, and as volumes increase to peak levels during the upcoming vacation season, every strategic decision is amplified. You can’t manage what you can’t measure. Implementing a fuel price management solution like PriceAdvantage where you can quickly measure and analyze the wins and losses of the day, and then adjust strategies quickly, is critical to making the highest profits of the season.
by John Keller | May 16, 2014 | Customer News, Fuel Price Management, Fuel Software, Industry News
As reported by CSPnet.com, Flyers Energy made another acquisition, this time adding the commercial fueling, wholesale contracts and two convenience stores from Redding Oil Co., a fuel distributor based in northern California.
Flyers Energy is northern California’s largest fuel distributor, and continues to grow as it expands its operations throughout the Western United States.
Auburn, Calif.-based Flyers Energy franchises the Flyers fuel brand and distributes wholesale and branded retail fuel, commercial lubricants, renewable fuels and solar power in the United States. Flyers Energy is the largest member of Commercial Fueling Network and is also the marketer for more than 100 Chevron, Shell, Valero, and 76 branded stations. Flyers Energy offers commercial fueling at 230,000 retail gas stations nationwide with the Flyers Fleet Card.
Flyers Energy selected PriceAdvantage in 2012 to manage their fuel pricing process throughout their retail locations.
“PriceAdvantage allows us to automate our fuel pricing process while aligning our pricing strategy and improving communications across our network of sites,” said Tom DiMercurio, Director of Accounting at Flyers Energy. “Our goal is to leverage technology to reduce operating expenses and to provide a means of tracking the implementation of price changes through the whole process. PriceAdvantage is allowing us to accomplish both of these objectives.”
