by John Keller | Dec 5, 2011 | Industry News, Retail Fuel Margins
In a December 4 CNN article Trilby Lundberg of the Lundberg Survey said retail fuel margins are on a downward trend as a result of ongoing reduced fuel demand throughout the US market. From a fuel price management and c-store public relations perspective, these articles are positive in that they present a realistic picture to the consumer, bringing awareness to the public that higher fuel prices do not mean more profits for fuel retailers.
According to NACS Online, average US retail fuel margins were at $0.215 on December 2, down from $0.27 the previous Friday.
by John Keller | Dec 2, 2011 | Fuel Price Management, Fuel Pricing Strategy, Industry News
NACS Online reported today that after 30 years of not allowing credit card payments at the fuel pump, Arco will now allow customers to use credit cards. Arco will advertise cash and credit fuel pricing on their fuel price signs.
The change in the Arco fuel price management strategy has already begun in Seattle and is expected to spread to the remaining Arco stores throughout the US west of the Rockies.
Since 1982, Arco has only accepted cash, debit and gas cards. A return to credit cards by Arco could have a major impact on pump prices in western states where the company and Costco often vie for the title of lowest-priced fuel retailer in the market, experts say.
The NACS article continues: “There’s no telling what the landscape would be like as to price and volume rankings if Arco is going to accept credit cards market-wide, but such a decision will be the second massive game-changing move in three decades, by the same brand,” says petroleum marketing analyst Trilby Lundberg.
“Everyone, from Chevron to Costco, and of course consumers, would be affected if Arco dumps its ultra low-price strategy. Brand loyalty would be transformed in one way or another. Arco’s price personality may or may not be revolutionized, but it would be affected not only by its taking credit cards but by the reactions of its competitors,” Lundberg added.
The fuel price differential between Arco and Costco has shrunk dramatically over the years, causing speculation for the basis of this change in Arco’s fuel price management strategy.
Fuel Pricing Analysts will be watching each of their markets carefully to see the impact of this fuel price strategy change across their competitors, and the fuel volume and margin impact. No question this is a significant change to the fuel pricing landscape.
The full NACS article may be found here.
by John Keller | Dec 2, 2011 | Industry News
Fuels demand was lower again in October year over year. According to the American Petroleum Institute, and reported by NPNweb.com, motor fuels demand was down 0.3 percent in 2011 compared to 2010. API chief economist John Felmy blames the “disappointing consumer confidence”.
This is another data point indicator showing the competitive nature of the fuels pricing industry, where c-stores are chasing an ever diminishing fuel volume market, albeit slight this month.
by John Keller | Nov 21, 2011 | Industry News
As we finish up the 2011 calendar year, we see electric car sales at a less than impressive number. The Chevy Volt has sales of about 10,000 cars. The Nissan Leaf has sales of about 8,000 cars. As a comparison, total car sales in the US should be in the range of 13 million for this year.
From a fuels price management perspective, it’s clear that electric cars are not on a near-term path to have a significant impact on overall fuels volumes. Petroleum is clearly the on-going primary source of fuels volumes sold.
by John Keller | Nov 18, 2011 | Industry News, PriceAdvantage, Retail Fuel Margins
ConsumerAffairs.com posted a report that this week fuel prices didn’t track with the price of West Texas oil. That’s consistent with an earlier blog article I wrote saying retail fuel prices are not likely to respond to changes in WTI. It’s interesting to see that the prediction is proving to be true.
by John Keller | Nov 16, 2011 | Fuel Price Management Solutions, Industry News, PriceAdvantage
PriceAdvantage, a division of Skyline Products, announced today that CEFCO Convenience Stores has added 71 sites to its ongoing partnership. The new sites will be implementing PriceAdvantage, a fuel price management solution that has proven to be invaluable to CEFCO, across its network. The new sites are in Texas, Louisiana, Arkansas, and Mississippi.
“PriceAdvantage has increased our efficiency across the fuel pricing process but most significantly in the time it takes us to price our 194 sites”, says Brett Giesick, Chief Retail Officer of CEFCO Convenience Stores. “We have found that it takes us only 1-2 hours to complete price changes across the network, including updates to the POS, pump and electronic price signs. So naturally it was an easy decision to include the additional new sites in our partnership with Skyline.”
Aaron McHugh, Head of PriceAdvantage division, adds “We are elated that CEFCO has seen such an improvement in their fuel pricing process with PriceAdvantage, and we’re excited to be a part of their success.”
PriceAdvantage is a highly specialized retail fuel pricing solution for the Convenience Store industry, designed to increase the efficiency and effectiveness of a retailer’s pricing process. PriceAdvantage provides automation for the entire fuel pricing process, from collection of competitive surveys, to efficient and detailed analysis for best price determination, to rapid speed-to-the-street price change execution. The ability to change prices immediately at the POS, fuel pumps and electronic price signs from the centralized headquarters location with one click makes the solution unique in the industry.