by John Keller | Mar 14, 2014 | Fuel Price Management, Fuel Software, Industry News, Retail Fuel Margins
The latest OPIS report shows that average retail fuel margins across the US dipped slightly this week. The average retail fuel margin average now stands at $0.145 per gallon, down $0.012 per gallon. The year to date retail fuel margin average is $0.159. The six week average is $0.148 per gallon, down for the fourth consecutive week.
The equivalent day this time last year saw average retail fuel margins at $0.218 per gallon. Still, even with margins that high for this specific week last year, the year to date margins for 2013 at this point in time were $0.151 per gallon, so average retail fuel margins this year are up $0.008 compared to 2013.
Last year retail fuel margins remained flat to finish off the quarter. Hopefully history will repeat itself and we’ll see a strong finish to 2014 Q1 margins and remain at the $0.159 level.
by John Keller | Mar 7, 2014 | Industry News, Retail Fuel Margins
Today’s OPIS report shows the average retail fuel margin across the US rose $0.023 per gallon this week to $0.157 per gallon. That’s the second consecutive margin increase, returning average fuel prices to levels last seen one month ago.
The year to date average is $0.160 per gallon and the six week average is $0.154 per gallon.
It was a year ago this week that retail fuel margins jumped nearly $0.10 per gallon, where they reached a high for the 2013 year to date of $0.261 per gallon. That means current retail fuel margin levels are now nearly $0.11 per gallon below last year.
Last year at this time we saw two consecutive margin decreases, and then a particularly difficult spring, where out of ten consecutive weeks from March into May, there were only two weeks showing margin increases. We can only hope that prices have already reached seasonal highs, giving retail fuel margins a chance to catch up and perhaps even gain some ground.
by John Keller | Feb 21, 2014 | Fuel Price Optimization, Industry News
According to Convenience Store News, an increasing number of grocers are entering the retail fuels business. Many grocers see the fuels business as a way to compete against the much larger national retail chains like HEB and Walmart. Grocers also see fuels as a way to build strong relationships with customers, for example, tie-ins between grocery items on promotion and fuel incentives.
What does this mean to the retail fuel manager? It means the retail fuel manager has to constantly be on guard, watching to see if a new competitor is changing the market landscape by slicing the retail fuel volume pie into smaller pieces. It means competitor survey prices need to be carefully analyzed to make sure they are truly comparable, without any kind of embedded reward discount that may throw off competitive price analysis. And it means it’s increasingly important to maximize overall store profitability both on the forecourt and in-store.
PriceAdvantage offers a powerful report that allows the fuel manager to view in-store merchandise sales overlayed on top of retail fuel sales so you can quickly see the effectiveness of both fuel and in-store promotions. The report is a Volume Correlation report and allows you to see store by store, or by market, the elasticity between forecourt transactions and in-store purchases. It is this type of information that allows you to be most profitable in this ever increasingly competitive landscape.
by John Keller | Feb 21, 2014 | Fuel Price Management, Industry News, Retail Fuel Margins
According to an excellent article written by Samantha Oller, Senior Editor of CSPNet.com, January retail fuel margins in 2014 varied widely across the different US geographic regions.
The highest margins in January 2014 could be found in the Midwest at 16.4 cents per gallon. In Texas, the retail fuel margins were lowest at 14.2 cents per gallon. In the Southeast, retail fuel margins were right in the middle at 15.2 cents per gallon.
The article cites Raymond James & Associates as well as OPIS as their source. The Raymond James & Associates research is based on their survey of a select group of c-store chains and fuel distributors: Casey’s General Stores, CST Brands Inc., Murphy USA Inc., The Pantry Inc., Susser Holdings Corp., TravelCenters of America, Susser Petroleum and LeHigh Gas Partners.
According to the 2014 NACS Fuels Report, on average, it costs a retailer about 12 to 16 cents to sell a gallon of gasoline. That means January has allowed retailers to start the year off in positive retail margin territory. Unfortunately, it is typically the month of February when we start seeing downward pressures on retail fuel margins as we head into the spring. Hopefully the c-store retail industry can cling to these margins in the coming months.
by John Keller | Feb 20, 2014 | Fuel Price Management, Industry News, Retail Fuel Margins
In early February I wrote a blog entry about how retail fuel margins in January 2014 were stronger than in January 2013. I based this conclusion using weekly OPIS reports from this year and last. You can find that blog entry here.
On February 20, Samantha Oller, Sr. Editor of CSPNet.com, wrote an article about a similar conclusion. Her article Fuel Margins Hit 7-Year High for January uses a research note by Raymond James & Associates. The research note shows that retail fuel margins in January 2014 averaged 18.5 cents per gallon (CPG) for regular unleaded, a 39% improvement year over year.
The OPIS weekly retail margin report uses a different approach than Raymond James & Associates. The Raymond James & Associates research is based solely on a survey of a select group of c-store chains and fuel distributors: Casey’s General Stores, CST Brands Inc., Murphy USA Inc., The Pantry Inc., Susser Holdings Corp., TravelCenters of America, Susser Petroleum and LeHigh Gas Partners. The other significant difference between the two reports is that OPIS reports the overall average of all fuels on a weekly basis, while Raymond James & Associates focuses only on regular unleaded and for the entire month of January.
Whether you use the Raymond James & Associates research, or the OPIS weekly reports as a baseline, this information is a good cross check comparison for your January margins.
by John Keller | Feb 14, 2014 | Industry News, Retail Fuel Margins
In the OPIS report this week, the US average retail fuel margin dropped another $0.032 per gallon to $0.146 per gallon. That’s a net loss of $0.046 per gallon from the most recent high three weeks ago back on January 24 when average retail margins stood at $0.192 per gallon. Current retail margins are at the second lowest level of the year, only slightly higher than on January 3 when they were at $0.112 per gallon.
The year to date average dropped to $0.169 per gallon, while the six week average was up slightly to $0.178 per gallon. This week last year retail fuel margin averages were at $0.122 per gallon.
Last year February margins bounced in the $0.08 – $0.12 range, jumping to $0.22 per gallon at the end of March. Hopefully we’ll see a repeat performance in 2014, and finish the quarter strong.
