by John Keller | Jul 25, 2014 | Fuel Price Management, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
The report from OPIS today shows that with the $0.016 increase in the average retail fuel margin this week, the retail fuel margin level now stands at $0.292 per gallon, the highest in over 12 months. The last time we saw retail fuel margins above $0.290 was July 5, 2013 when the average retail fuel margin hit $0.302 per gallon, the highest margin of 2013.
This week marks the fourth consecutive margin increase, totaling an increase of $0.135 per gallon since June 27. We’re seeing a slow but steady rise in the year to date average, with the current year to date retail fuel margin being $0.175 per gallon. The average for this quarter is $0.248 and the six week average is $0.218 per gallon.
Last year at this time, we were at $0.176 per gallon. That means we’ve now seen retail fuel margins above last year for three weeks in a row. Interestingly, this time last year the average retail fuel margin up to that point was $0.177 per gallon, so we’re tracking nearly identically on an annual basis.
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 | Jul 18, 2014 | Customer News, Fuel Price Management, Industry News
As reported by Convenience Store News, PriceAdvantage Customer Advisory Board member Parker’s just won numerous awards, including “Best Convenience Store”, “Best Luncheon Bargain,” “Best Deli” and “Best She Crab Soup” from readers of the Savannah Morning News and The Island Packet newspapers.
In addition, Parker’s finished in the top three of the metro area’s retail stores and restaurants for: “Best Sweet Tea”, “Best Downtown Shop”, “Best Soul Food”, “Best Fried Chicken”, “Best Shrimp & Grits” and “Best Wine Selection” for Parker’s Market Urban Gourmet.
Parker’s has been a PriceAdvantage customer for over two years, taking full advantage of the integrations with Skyline electronic price signs, VeriFone POS, GasBuddy OpenStore, and PriceAdvantage Optimization. Watch a short video with Jeff Bush, Director of Fuel Management at Parker’s here.
by John Keller | Jul 17, 2014 | Customer News, Fuel Price Management, Industry News
Convenience Store Decisions reported today that Alex Olympidis, Director of Operations for PriceAdvantage customer Family Express Corporation, has joined the Board of Directors for the Young Executives Organization within the National Advisory Group.
Alex replaces Ben Jatlow who worked at PriceAdvantage customer High’s of Baltimore before recently joining NCR.
The National Advisory Group mission is to provide retail leaders of small to mid-size and family-owned convenience chains a peer-to-peer forum for the exchange of ideas to improve their business performance.
The Young Executives Organization within the NAG cultivates young talent in the convenience store and petroleum industry through implementation of education and networking. YEO accomplishes this mission by leveraging the experience of NAG members to help foster superior leadership skills. YEO members are industry leaders who are approximately 40 years of age or younger. Members are entrepreneurs, leading top businesses and actively pursuing a higher level of professionalism in the convenience store and petroleum marketing industry.
by John Keller | Jul 11, 2014 | Fuel Price Management, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
According to the OPIS report today, the average retail fuel margin is up $0.033 per gallon this week to $0.228. The Q3 average now stands at $0.212 while the six week average is $0.185 per gallon.
Today’s margin is the highest since May 16 of this year.
Last year at this time the average retail fuel margin stood at $0.171 per gallon. That means this week marks the first time we’re above last year’s margin since June 13, nearly a month ago.
From a fuel price management perspective, we can see the market using the downward trend of crude and wholesale fuel costs to seize the opportunity to “come down like a feather” and make up for lost margins in Q1 and Q2 of this year.
by John Keller | Jul 11, 2014 | Fuel Price Management, Fuel Price Optimization, Fuel Pricing Technology, Industry News
Here’s something many people may not know: fuel efficiency improves during the summer months. NACS provides an excellent explanation here, with four key reasons displayed below:
A number of factors, all weather related, can increase fuel efficiency by as much as 10% during the summer months, regardless of the type of fuel purchased:
- Engines are more efficient: In the colder months, it can take longer to start a car and multiple cranks of the engine waste fuel. In addition, many drivers give their cars a chance warm up, whether to defrost windows or heat the interior. This idling detracts from fuel efficiency. But even without this idling, car engines are less efficient when cold. It may take a while for a cold engine to achieve peak efficiency and on extremely cold days it may never achieve peak efficiency. Overall, engines perform much better when outside temperatures are 90 degrees, not 20 degrees.
- Ice and snow detract from mileage: Ice and snow can hurt mileage, whether on the roads or on a vehicle. Cars are likely to spin their wheels under icy conditions, reducing mileage. Also, drivers tend to travel at less fuel-efficient speeds under poor road conditions brought on by extreme winter weather. In addition, any snow or ice on a vehicle adds weight and makes the vehicle less aerodynamic — as does any weather-related grime on the vehicle. One more thing: Hot air is less dense than cold air. All things being equal, a vehicle is more aerodynamic travelling through hot air.
- Better tire pressure: Tires lose air pressure in colder temperatures. If a tire’s air pressure isn’t adjusted in the colder months, it will be flatter and increase resistance and friction, leading to reduced fuel efficiency. The opposite occurs in the warmer months, and fuel efficiency can increase.
- Lubricants perform better: A car’s oil is more viscous (thinner) when it is warm and engines perform more efficiently when oil is thinner. The same holds true for all other lubricants. In addition, people take better care of their vehicles when it is warmer outside. They are more likely to change the oil and conduct other routine maintenance that can improve fuel efficiency.
