by John Keller | Nov 15, 2013 | Industry News, Retail Fuel Margins
According to the latest OPIS report, the average retail fuel margin across the US dipped $0.009 per gallon this week to $0.222 per gallon. That equates to a combined $0.027 per gallon loss over the past two weeks.
The year to date average continues to uptick slightly, and now stands at $0.192 per gallon. The Q4 average now stands at a healthy $0.224 per gallon, while the six week average is a solid $0.219 per gallon.
Last year at this time retail fuel margins were still in a free fall. The average retail fuel margin for this same Friday last year was $0.214 per gallon.
by John Keller | Nov 13, 2013 | Industry News, Retail Fuel Margins
OPIS reported the average US retail fuel margin dipped $0.018 per gallon this week to $0.231 per gallon. Retail fuel margins are now back to levels last seen on October 11.
The year to date average is now $0.191 per gallon and the average for Q4 is $0.225 per gallon. The six week average is also $0.225 per gallon.
Last year at this time the average retail fuel margin in the US was $0.292 per gallon. The average retail fuel margin for Q4 last year was $0.230 per gallon.
by John Keller | Nov 8, 2013 | Fuel Price Management Solutions, Fuel Price Optimization, Fuel Pricing Software, Fuel Pricing Strategy, Industry News, PriceAdvantage, Retail Fuel Margins
In October 2013, PetrolPlaza recorded an interview with me to discuss the unveiling of the new PriceAdvantage “Margin Percentage” report. The full interview can be found here.
This new report allows retail fuel managers to view retail fuel margins as a percentage of fuel price. Traditionally retail fuel margins have always been measured in terms of cents per gallon, with a generalized definition of success as being $0.15 – $0.20 per gallon. The problem with this thinking is that this number was defined back when retail fuel prices were in the sub-$2.00 per gallon range. Now that retail fuel prices are at $3.00 levels and above, these same cents per gallon ranges represent a much lower percentage of the retail price. Compared to other c-store product category margins, these are a very low percentage of price indeed, and that can be quite alarming to marketing managers who are less familiar with the fuels business.
In fact, marketing managers are often perplexed when fuels managers express fuels margins in terms of cents per gallon. That’s where this new report provides a nice bridge between retail fuels groups and marketing. The traditional cents per gallon way of measuring fuels margins is not going away any time soon, so this report displays side by side margins as cents per gallon, and as percentage of price. Thus the Margin Percentage report acts as both a translator between two divisions of the company, and as a new perspective into profits.
The September issue of CSP magazine included an article titled “Stop Making Cents?“. It was this issue that introduced the idea to the PriceAdvantage team, and we’re proud to say that between the time when the article was released in September, and the NACS show in October, we were able to develop and demonstrate the Margin Percentage report in our NACS exhibit booth. Customers and prospects loved it, with the feedback being that this report will make it so much easier to communicate with Marketing departments, and to ultimately optimize store profits.
by John Keller | Nov 4, 2013 | Industry News, Retail Fuel Margins
OPIS reported a $0.055 jump in retail fuel margins across the US this week. Retail fuels margins across the US now stand at an average of $0.249 per gallon. That increase brought the retail fuels margin year to date average to $0.190 per gallon and the Q4 average to $0.223 per gallon. The six week average is holding steady at $0.233 per gallon.
Average retail fuel margins are nearly back to levels last seen at the beginning of October.
This same week in 2012, retail fuel margins were at an astounding $0.368 per gallon. But that didn’t last. Over the course of November 2012, average retail fuel margin levels dropped four straight weeks from $0.368 to $0.167 per gallon.
Let’s hope history doesn’t repeat itself and retail fuel margins can hold steady at current levels.
by John Keller | Oct 31, 2013 | Industry News
A recent Wall Street Journal article describes how another set of truck fleets are accelerating a shift to natural gas vehicles. The article specifically lists Lowe’s, Proctor & Gamble, United Parcel Service, and FedEx. New natural gas engines by Cummins Westport and Volvo AB are helping spur this shift.
Up until now, higher initial cost of vehicles, lack of natural gas vehicle suppliers, and the lack of a natural gas fuel station infrastructure has hindered the adoption of natural gas vehicles. But companies like ENN Group have announced plans to build a network of natural gas stations targeting long haul trucking companies. ENN Group is one of China’s largest private companies, and has already built natural gas stations in China. In addition, Clean Energy Fuels, founded by T. Boone Pickens, has a network of 400 natural gas fueling stations and is expanding across the US.
From a fuel pricing standpoint, this is yet another indicator that natural gas is on the horizon as a viable fuels product. It’s critical to monitor the progress of natural gas in each of your markets and decide when it makes sense to add natural gas to your product portfolio.
by John Keller | Oct 30, 2013 | Industry News
The US states of Washington, California, Oregon, as well as the Canadian province of British Columbia are now part of a climate pact that is intended to rein in greenhouse gas emissions and fight global warming.
What is the impact on retail fuel pricing? Part of the pact includes encouraging the use of electric vehicles in that geographical area. And that means two things: continued trending toward lower fuel volumes sold in those markets, and opportunities for c-stores to add electric charging to their product line.
Forward thinking c-stores like PriceAdvantage customer Spinx have been early adapters adding electric vehicle charging stations to their product portfolio back in 2010. The Spinx Company is focused on making life easier for their customers, and electric charging stations are part of that vision.
Retail fuel marketers in this area can either wring their hands as they see their fuel market continue to shrink, or they can embrace the change and offer electric charging stations to gain some of these new customers.
