by John Keller | Sep 27, 2012 | Fuel Price Management, Industry News
The US Energy Information Administration reported that gasoline consumption for the first half of 2012 was down .3% compared to the first half of 2011. The year over year economic growth of 2012 was more than offset by the increased fuel efficiency of the in-use vehicle fleet, as well as higher gasoline prices, according to the US EIA.
From a fuel price management perspective, that means that across the enterprise, c-store fuel gallons sold are likely to be lower year over year, and that fuel volume targets set at the beginning of the year may need to be adjusted downward.
It also means that the trend for the past five years is continuing this year, where the overall market for gasoline continues to shrink, and c-stores are battling for pieces of a smaller pie. Only the c-store companies with robust fuel price management software and sophisticated fuel price optimization and analytics capabilities will be successful.
by John Keller | Sep 26, 2012 | Fuel Price Management, Industry News
On April 30 of this year when Energy Transfer Partners announced they were acquiring Sunoco, it left the fate of Sunoco’s 4,900 c-stores uncertain. Analysts speculate ETP will sell the 4,900 stores because the stores don’t fit well with the rest of the ETP assets.
In a Convenience Store News article today, there is a list of possible acquirers. Below is the list, with the number of stores they currently operate.
- Wawa: 599
- Marathon Petroleum: 2,670 stores
- The Pantry: 1,615
- Alimentation Couche-Tard: 3,585 stores
- Global Partners: 1,000 stores
It is immediately apparent from this list that should any of the above companies acquire all the Sunoco stores, it would be a dramatic growth in their business, essentially a minnow swallowing a whale. Even c-store giant 7-11 with their 7,341 stores would see a store count increase of over 60%. Perhaps a more likely scenario is the 4,900 Sunoco stores will be splintered and sold off in chunks.
It will be interesting to follow this story as it develops. But one certainty is this: the fuel price management market and strategies where these Sunoco stores operate are destined to be different after any sort of acquisition.
by John Keller | Sep 25, 2012 | Fuel Pricing Technology, Industry News
There is general consensus from NACS and fuel management analysts that for the next 20 years, liquid petroleum fuels will continue to be the predominant energy source for how consumers power their vehicles. And though electric vehicles have yet to put a big dent in the number of vehicles sold, the electric vehicle company Tesla today made an announcement that could have a significant impact on how quickly electric vehicles are embraced in California and the rest of the US.
Today Tesla CEO Elon Musk announced that Tesla is building Supercharging stations that charge twice as fast as any chargers now in use. Mr. Musk announced that these Supercharging stations will be installed at highway rest stops. Six are already installed in California, allowing drivers to make it from Los Angeles to San Francisco and from Los Angeles to Sacramento. Tesla plans to have over 100 of these stations throughout the US over the next three years.
The new Supercharging stations are intended to allow drivers to fill up their battery while they take a bathroom break and have a fast meal, similar to the standard practice of taking a road trip pit stop today.
Will demand for these Supercharging stations be overwhelming for travelers and make it inconvenient because people need to wait in line to use one? Perhaps, but certainly that is a problem Tesla would love to have, since it means there must be enough electric cars on the road to cause such demand.
One thing we can count on: the trend of decreasing gasoline consumption is going to continue, as gasoline and diesel fuel vehicles become increasingly fuel efficient, and the electric vehicle market share continues to grow. From a fuel price management perspective, that means a more competitive marketplace, where c-stores are competing for an ever-shrinking part of the liquid fuel pie, and only the most savvy c-store chains running robust fuel pricing software will survive.
by John Keller | Sep 20, 2012 | Industry News, PriceAdvantage
Both Valero and Susser have decided to go through a spinoff of part of their business, each with the same goal in mind.
Sam Susser, the CEO of Susser Holdings Corp. said in an earnings call last month that the value of the wholesale division has not been fully recognized, and the intention was to spin it off as a separate division.
Valero in their September 2012 investor presentation said their board had authorized management to pursue a separation of their retail business because investors and analysts have ignored the higher potential value of their retail segment, and to unlock value to their shareholders. This was the same earnings announcement when Valero’s retail segment achieved their highest quarter operating income on record. On a side note, Valero is using PriceAdvantage as their fuel price management solution at all of their company stores.
On September 20, Susser took their spun off wholesale division public at $20 per share, trading as SUSP on the New York Stock Exchange, and as of September 24, the stock is holding steady at $23/share. That successful IPO generated $195 million for the company.
That’s an interesting benchmark to use as we watch Valero’s move to increase their shareholder value as well. Reuters sources reported the retail business spinoff could generate $3.5 billion to Valero.
by John Keller | Sep 10, 2012 | Industry News, Retail Fuel Margins
Casey’s announced their retail fuel margins were $0.149 per gallon in Q1 of the 2013 fiscal year. That retail fuel margin is slightly ahead of their stated company goal of $0.140 per gallon. Retail fuel margins for the same period last year were $0.172 per gallon. As a comparison, Valero reported retail fuel margins of $0.30 per gallon for the quarter ending July 31. The Pantry reported retail fuel margins of $0.146 per gallon on August 7.
Same store retail fuel volumes were down .2%, but total gallons sold for the quarter were up 3.7% to 394.1 million gallons. CEO Robert J. Myers blamed the decreased same store fuel volumes on excessively hot weather in several of their areas of business.
With a store count of 1699, the monthly gallons per store average was 77,300 gallons. NACS reports the average c-store sells 124,000 gallons of fuel per store per month.
Casey’s has 18 new stores under construction and 27 new stores under written agreement to purchase. Casey’s has an annual goal of increasing their total number of stores by 4-6%. That would equate to between 68 and 100 new stores for the year. The same day Casey’s announced their quarterly earnings, they also announced they are acquiring 22 stores from Kum & Go.
by John Keller | Aug 27, 2012 | Fuel Pricing Strategy, Industry News
BP has temporarily stopped distributing Premium and Midgrade gasoline to the Chicago area in order to further test the fuel from the Milwaukee terminal. Regular unleaded gasoline has already passed these quality tests and is in distribution to Northwest Indiana, Chicago, and Milwaukee.
BP reported to CBS news that 10,000 consumers have contacted BP to report issues caused by the bad fuel.
From a fuel price management perspective, BP dealers need to continue to recognize the bad public relations this mistake has caused, and use their fuel price optimization software to annotate this event in their records for future reference. Dealers selling a fuel brand other than BP may be able to adjust their fuel price optimization strategy to increase their retail fuel margins during this time when BP has such PR issues, and BP premium and midgrade is scarce.