by John Keller | Apr 7, 2014 | Fuel Price Management Solutions, Fuel Software, Industry News
Today there’s a good article on NACS Online that includes several key statistics.
- Gasoline demand increased 1.1% in 2013, the largest annual increase since 2006 according to the US EIA.
- 5% of those surveyed say gas prices are too high at $3.30 per gallon.
- 65% of those surveyed say gas prices are too high at $3.50 per gallon.
- 91% of those surveyed say gas prices are too high at $4.00 per gallon.
- 53% of those surveyed say they are changing driving habits now, compared to 68% in the spring of last year.
What are the key takeaways from a fuel price management perspective?
- While regional fuel volumes may vary, on a national level across the US it’s worth noting that fuel volumes were higher last year. As you manage your fuel volumes and review the numbers from last year, it’s good to keep in mind this key benchmark for comparison sake.
- As you fine tune your fuel pricing strategy, bullets 2, 3 and 4 above point to specific gas price thresholds that you may want to stay clear of, opting instead for a price of $3.49 for example if margins support it.
- The numbers for fuel volumes aren’t yet in for this year, but bullet 5 above is an indicator that overall demand may hold steady this year or perhaps even increase a bit as the US economy continues to rebound. Perhaps in your specific markets there may be more fuel volumes available to grab.
The original article may be found here.
by John Keller | Apr 4, 2014 | Fuel Price Management Solutions, Fuel Price Optimization, Fuel Software, Industry News, PriceAdvantage
On page 90 of the March issue of Convenience Store News magazine, there is some interesting survey insight regarding c-store retail fuels sales, comparing 2013 to 2012:
- 40.9% of c-stores surveyed said gas price volatility caused a decrease in store traffic.
- 38.6 % said gas price volatility caused a decrease in profitability.
- 27.3% said gas price volatility caused a decrease in sales.
- 13.6% said gas price volatility caused improved margins.
- 17.3% said they had increased gallons sold per transaction.
- 32.7% said they had decreased gallons sold per transaction.
- 50% said they had the same gallons sold per transaction.
What are we to make of this? Savvy c-store chains are able to manage what they measure, and develop effective fuel pricing strategies that fit into the overall profitability of each store. That means optimizing store traffic, acknowledging cases when sales and gallons sold per transaction may be lower, but managing every penny to optimize profits, both at the forecourt and in the store.
PriceAdvantage in conjunction with PDI allows you to directly see the correlation between fuels sales and other transactions of any kind. We call this the Volume Correlation report, unveiled at NACS and released in PriceAdvantage version 2013.3. Using PDI information, you can quickly see the correlation between fuel promotions and in-store sales, number of transactions, and average transaction size by product category, overlayed on top of volumes sold and price per gallon.
How do c-stores survive in today’s volatile fuels market? The old adage “You can’t manage what you can’t measure” holds true. With PriceAdvantage c-stores manage what they measure.
by John Keller | Mar 24, 2014 | Customer News, Fuel Price Management Solutions, Fuel Pricing Software, Fuel Pricing Strategy, Fuel Pricing Technology, Fuel Software, PriceAdvantage, Retail Fuel Margins
Earlier this month, CSPnet.com reported that CST Brands has identified 100 stores that are candidates for sale. You may find the article here. This is part of an ongoing effort at CST Brands to “assess its asset base and close convenience stores that are no longer core to its ongoing strategy”.
Kim Bowers, the CEO of CST Brands, said in the latest earnings call that in 2013 CST Brands closed 11 stores based on their “lower cash flow levels”. In other words, CST Brands pruned their portfolio of stores to rid the company of their bottom performers.
PriceAdvantage provides the analysis views and reports to quickly zero in on the under-performing locations by comparing store performance to target, to last year, and to other stores. Easy to read tools such as heat maps with color coded push pins show at a glance stores that are dragging down entire regions with their lower fuel volumes and fuel margins.
CST Brands, when they were under the Valero umbrella, worked closely with the PriceAdvantage team to develop precisely these sorts of views and reports so they could optimize their entire fuels business. Since rolling out PriceAdvantage across all their stores in 2012, CST Brands now reaps the benefit of this rich information in PriceAdvantage to deliver on the promise to Wall Street that CST Brands will continue to identify the stores that are the best candidates for sale, and the best candidates for the CST Brands wholesale business.
by John Keller | Mar 24, 2014 | Customer News, Fuel Software, Industry News, Retail Fuel Margins
According to a recent research note from Raymond James & Associates, retail fuel margins averaged $0.185 per gallon in January (up 39% year over year) and $0.141 per gallon in February (down 13% year over year). The research is based on tracking retail fuel margins from Casey’s General Stores, CST Brands, Murphy USA, The Pantry, Susser, and TravelCenters of America.
Raymond James & Associates uses this information, as well as data from OPIS and futures contracts, to predict retail fuel margins of the first quarter to be $0.11 per gallon for CST Brands. That would be a 38% improvement year over year, attributed to a new pricing strategy that has a greater emphasis on margins, implemented after CST Brands spun off from Valero last year.
CST Brands uses PriceAdvantage as their fuel software across all their US stores.
by John Keller | Mar 24, 2014 | Customer News, Fuel Pricing Software, Fuel Pricing Strategy, Fuel Software, PriceAdvantage
The first meeting of the PriceAdvantage Customer Advisory Board was held at the corporate headquarters of CST Brands in San Antonio, Texas, and the meeting was a smashing success.
The members of the PriceAdvantage Customer Advisory Board are
- Tony Castro, Manager Fuel Pricing, CST Brands
- Gabe Olives, Director of Fuels, Rutter’s
- Bryan Zeiger, Director of Fuel Marketing, Spinx
- Joe Wills, Fuels Manager, The Wills Group
- Lance Gentry, Director of Fuels and Information Technology, Kocolene
- Jeff Bush, Director of Fuel Management, Parker’s
Tony Castro showed us how CST Brands uses their PriceAdvantage fuel software to manage fuel prices across each of their stores, as well as how CST Brands uses PriceAdvantage for executive level reporting. We also had a lively discussion about what is most important for the upcoming releases of PriceAdvantage.
The mission of the Customer Advisory Board is to connect industry leaders for the purpose of innovation. The PriceAdvantage team has always put an emphasis on customer collaboration, and the Customer Advisory Board is one more way to make collaboration happen.
We learned a lot from our inaugural gathering, and I look forward to our upcoming meetings as we build the future of PriceAdvantage together.
by John Keller | Mar 20, 2014 | Fuel Price Management Solutions, Fuel Pricing Software, Fuel Pricing Technology, Fuel Software
The PriceAdvantage team is pleased to announce the first new release of the year, version 2014.1. This is yet another release based on close collaboration with our customers. See the following list for some highlights.
1. The average retail fuel price for Regular Unleaded displays at the top of the Fuel Pricing view and All Stores web page, allowing you to quickly see the average Unleaded retail fuel price for any market you are viewing.
2. Hover over the Replacement Margin and see the rack cost and import date, so you can be certain the displayed margins are current and up to date.
3. Maps display the Regular Unleaded price for stores and competitors without having to click the pushpin, allowing you to see at a glance your price relative to the price of your competitors, and quickly know whether or not your current prices are in-line with your strategies.
4. Optionally set the retail sales tax for each store and include that percentage in the dynamic calculation of replacement margins when playing what-if pricing scenarios.
The feedback from our customers is that version 2014.1 continues to raise the bar in our easy to use interface. We take great pride in making fuel software that offers our customers a highly intuitive user interface, and we will continue to focus on that as a strategic advantage throughout 2014.
In 2013 we released five versions of PriceAdvantage, and we’re off to a great start in 2014. Stay tuned for more exciting software releases from us this year, and as always, please contact me at johnkeller@skylineproducts.com with any suggestions you’d like to see in a new version.
