by John Keller | Apr 4, 2014 | Industry News, Retail Fuel Margins
In the OPIS report today, average retail fuel margins across the US dropped $0.014 per gallon. The national US average is now $0.154 per gallon, just under the year to date average of $0.158 per gallon.
The six week retail fuels margin average is $0.150 per gallon. This same Friday last year had the average retail fuels margin at $0.175.
In 2013, we saw a dramatic increase in retail fuel margins the second Friday of April, where the average jumped to $0.268 per gallon. April was a strong year in 2013, with the average retail fuel margin for the month being $0.219 per gallon. Let’s hope retail fuel margins turn around again this year.
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 28, 2014 | Industry News, Retail Fuel Margins
The OPIS numbers released in the NACSDaily report today show US retail fuel margins rose for the first time in two weeks with an increase of $0.025 per gallon. The average retail fuel margin across the US now stands at $0.168 per gallon. This same day last year the average retail fuel margin was $0.22 per gallon. The six week average now stands at $0.146 per gallon, up $0.004 from last week.
The March retail fuel margin average this year finished at $0.153 per gallon, compared to $0.212 in March 2013. The first quarter margin average this year finished essentially the same as last year, with an average of $0.158 per gallon in 2014 compared to $0.159 per gallon in 2013.
In 2013, the Q2 average retail fuel margin was $0.191 per gallon. Let’s hope that 2014 can repeat that margin gain so we can see a more profitable quarter.
by John Keller | Mar 27, 2014 | Industry News
In the latest issue of CSP Magazine, there is an OPIS advertorial with some frightening news from the OPIS surveys of nearly 5000 stations across the US.
- Year to date fuel volumes down an average of 4.8% through February 8
- Median fuel gallons are down 5.8% through February 8
- 68% of stores surveyed had volume declines year over year
- 35% of stores surveyed had volumes down more than 10% year over year
- Same store volumes are down 6.4% for the first six weeks compared to last year
OPIS spokesman Brian Norris attributes the lower volumes to the standard trends of more fuel-efficient vehicles and more telecommuters. But Mr. Norris also says the “horrendous weather seen in much of the country” had a significant impact.
I expect we’ll see this gloomy news reflected in the financial results of the publicly held c-store companies when it’s time to report to Wall Street. Of course it’s a rare financial analyst who understands these kinds of environmental pressures that are outside the control of the c-store chain.
No doubt these statistics point out how competitive the retail fuels business is nowadays. It certainly is not for the faint of heart. Without the proper fuel software like PriceAdvantage, it simply is not possible to compete effectively.
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 21, 2014 | Fuel Price Management, Industry News, Retail Fuel Margins
In today’s OPIS report, the US average retail fuel margins are down $0.002 per gallon to $0.143 per gallon. That makes for the second consecutive drop in retail fuel margins. The year to date average now stands at $0.157 per gallon and the six week average is at $0.142 per gallon.
This day in 2013 the average retail fuel margin in the US was $0.05 per gallon higher, at $0.195 per gallon. That makes four consecutive weeks where the retail fuel margin last year was higher than this year.
The weekly average for the month of January this year was $0.172, for February this year was $0.147 per gallon, and so far the weekly average for this March stands at $0.148 per gallon. In comparison, last year the January retail fuel margin average was $0.148, February was $0.105, and the March retail fuel margin average was $0.212. So it appears that even though 2014 started off strong with a solid January and February compared to last year, March is going out like a lamb with margins much lower than 2013.
