by John Keller | Nov 4, 2011 | Industry News, Retail Fuel Margins
Tesoro reported in their Q3 earnings report that retail fuel margins were down $.06 from the same three months in 2010. In 2011 the three months retail fuel margins were at $.16 compared to $.22 for the same period in 2011. For the nine months ended this period, retail fuel margins were at $.18 compared to $.22 from the same nine months in 2010.
The monthly fuel volume per store for these three months was 114,961 gallons. The total number of Tesoro c-stores for this three month period is 1186, up from 880 in 2010.
For the 376 company-operated stores, average fuel sales was 169,326 gallons per month.
According to NACS, the average US c-store sells 121,000 gallons of fuel per month annually. That means over the past three months, Tesoro company-owned stores sold about 40% more than the US national monthly average, while dealer stores sold about 26% less than the US national monthly average.
by John Keller | Oct 27, 2011 | Fuel Price Management, Fuel Pricing Strategy, Industry News
The Ball State Daily News reported a recent fuel price war between two c-stores racing each other to the basement. A new Phillips 66 store kicked things off with a grand opening celebration and a fuel price of $3.19 for regular. The BP station across the street lowered their price by $.10. The war was on, and each c-store kept dropping their fuel price by $.10 increments back and forth before settling on $2.19. For a brief time, the BP station was priced as low $1.99. The lines of cars to enter the c-stores got so long the local police department had to be called in to direct traffic. By 2pm, the BP store raised its price back to $3.19.
This is a great example of what happens when a fuels pricing strategy goes haywire. Once fuel prices get to be so out of whack with the market, abnormal traffic patterns ensue. From a fuel price management perspective, lesson learned is there is no substitute for fuel pricing analysts to use wisdom when setting optimized fuel prices. There’s no such thing as an easy button – the market is too dynamic to allow automation to run amok and take the place of human wisdom.
by John Keller | Oct 26, 2011 | Fuel Price Management, Industry News
According to an article from Cars.com and USA Today, the US Department of Transportation reports that travel on US roadways through August 2011 has reached the lowest levels since 2003. Specifically, travel in the month of August 2011 was down 1.7% from the same period in 2010, as low as August 2009 during the recession. Rural interstate travel decreased 2.7% while urban travel was down 0.5%. The Northeast region saw travel drop 2.2% in August, while in the West travel dropped 1.2%.
From a Fuel Price Management perspective, fuel pricing analysts need to be aware of this report as yet another data point indicating that the size of the fuels market is on the decline. That makes for more heated c-store competition for fewer fuel gallons sold, market conditions where only the strongest survive.
by John Keller | Oct 21, 2011 | Fuel Pricing Strategy, Fuel Pricing Technology, Industry News, PriceAdvantage
Today Convenience Store News announced that Exxon just completed the sale of nearly 300 c-stores. Back in 2008, Exxon told USA Today they wanted to sell its c-stores because “it’s so hard to make money selling gas and diesel fuel to customers.”
Yes, Exxon, the days are over when you could simply open a store, fly your flag, and make money selling fuel. The retail fuel market is more dynamic and more competitive than ever. Fuel costs change daily, competitors are increasingly aggressive, and consumers are careful to pick where they buy fuel. It’s certainly not a business for the faint of heart.
And that’s precisely where fuel price management solutions like PriceAdvantage come in. Fuel Analysts use PriceAdvantage to quickly see what has changed in the market over night, and in a matter of minutes, their stores are implementing price changes to react. PriceAdvantage allows them to get the right price to the right store at the right time, not eight hours after the morning commute, but in time to maximize their fuel profits that same business day. Fuel Analysts use PriceAdvantage to carefully review their store / region / market performance by fuel margin and fuel volume, compared to target, and compared to last week, last month, and last year. Fuel Analysts make adjustments to fuel pricing strategies and tweak and tune to make necessary adjustments based on market changes, and to optimize prices across the enterprise. When competitor fuel prices change throughout the day, Fuel Analysts can choose to quickly respond with fuel price changes of their own no matter where they are, using their laptop or smart phone.
C-stores simply can’t compete by managing fuels prices with the old methods of spreadsheets, phone calls, and emails. It takes the closed loop fuels price management solution of PriceAdvantage to be profitable and to stay in the fuels price game.
by John Keller | Oct 10, 2011 | Industry News
Numerous news stories today are predicting that fuel prices have hit bottom and are back on the rise. Several local stories are reporting that fuel prices have already begun to rise, including CNN who quotes sources from the Lundberg Survey as saying “It does suggest that this may be it for the decline.” News stories such as this are setting public expectations for fuel price increases in the future.
by John Keller | Sep 28, 2011 | Fuel Price Management, Fuel Price Management Solutions, Fuel Pricing Software, Industry News
According to the latest MasterCard SpendingPulse report, U.S. gasoline consumption was down 2.7% compared to the previous year for the week ending September 23, 2011. For the four week average, demand was down 2.9% compared to the previous year. Demand was down 2% from the prior week. According to the report, that marks the 27th week in a row where demand has continued to fall.
The MasterCard report is based on sales transactions across 140,000 stations throughout the U.S.
From a fuel price management perspective, fuel analysts and fuel managers must use their fuel pricing software solutions to carefully monitor demand in each of their markets, and acknowledge that demand quite possibly is lower than previous years. Fuel analysts and managers mustn’t panic if they see demand trending downward, given the overall demand shifts across the nation as a whole.
