by John Keller | Jul 19, 2011 | Industry News, Retail Fuel Margins
Alimentation Couche-Tard Inc. in their quarterly report announced that US retail fuel margins for the past three months were $.14 per gallon. That’s a decrease of 1.2% compared to the same time period last year.
For the 12 months ended April 25, retail fuel margins were $.1579 per gallon, up from $.1451 for the same 12 months the previous year.
For the three months ended April 25, Couche-Tard retail sales in the US were approximately 145,000 gallons per month per site. Same-store US motor fuel volume was up .3% for the quarter.
According to NACS, the average US c-store sells 121,000 gallons of fuel per month annually. That means over the past three months, Couche-Tard stores sold about 20% more than the US national monthly average.
Couche-Tard currently has a total store count of 5795.
by John Keller | Jul 18, 2011 | Fuel Price Management, Fuel Price Management Solutions, Fuel Pricing Strategy, Industry News
Walmart joined the retail fuel price loyalty game this summer, partnering with Murphy Oil to offer $.10 discounts on fuel when the purchase is made using one of the Walmart payment cards. Loyalty reward incentives are becoming mainstream across retail fuel c-stores and grocery store chains.
So the question is, how can the fuel manager compete? The answer lies in understanding the fuel pricing strategy at Murphy.
Murphy focuses their fuel price management solution around the urgency of fuel price changes. At Murphy, the fuel price strategy is a volume game. Murphy uses price as their number 1 advertising, as their billboard. Murphy advertises their price on enormous gas price signs, projecting such confidence that the consumer believes Murphy must have a low price since the sign is so bold. Murphy has reached such operational efficiencies in the fuel price change process, they can react extremely quickly to hourly wholesale price fluctuations. Murphy routinely changes fuel prices 2-3 times per day to squeak out the highest possible volume and profit hour by hour, based on these hourly wholesale price fluctuations. Speed to the street wins. When wholesale prices go up, retail price changes can happen almost immediately. When wholesale prices go down, Murphy can make it very difficult on the stores around them by dropping retail prices right away. Murphy sells such high volumes of fuel, the difference of a fraction of a penny, multiplied out times every gallon sold across their enterprise, yields huge profits.
The only way to compete against Murphy is to implement a fuel price management solution that watches Murphy prices like a hawk. Subscribe to the OPIS Radius report and get pricing feeds througout the day. Track every Murphy price move by allowing store and territory managers in the field to quickly report new Murphy prices to headquarters, or better yet, empower these managers to use their mobile device to change prices immediately when Murphy moves. Then the fuel manager can know what’s happening in the field in real time, and analyze store performance in terms of my price vs. competitor price, and gallons sold as compared to the same day of the previous four weeks. With this fuel price management solution, fuel managers can quickly make adjustments to their Murphy competitor strategy, and maintain the strategy that makes sense, whether it is matching Murphy, or staying within the price differential that the market will bear.
by John Keller | Jul 18, 2011 | Fuel Pricing Strategy, Industry News
In today’s US Energy Information Adminstration weekly fuel price report, the USEIA revealed a $.04 increase for the national average price of Unleaded Regular fuel. That’s an $.11 increase over the past two weeks. The US national average retail fuel price of unleaded gasoline now sits at $3.68/gallon, a gallon of midgrade rose to $3.79, and a gallon of premium rose to $3.93. These prices now reflect levels not seen since mid-June.
The regional area hit hardest was the Lower Atlantic, where the average price for unleaded rose $.07 to $3.72/gallon. The region with the lowest increase was the “West Coast Less California” region, where prices were unchanged from last week, remaining at $3.69.
As for individual states, Texas had the largest fuel price increase of the week, where prices rose $.08/gallon for unleaded, with an average price of $3.65/gallon.
The highest average price in the nation for Unleaded is now in New York, up $.06 reaching $3.97/gallon. In Chicago, a gallon of Unleaded is priced the highest in any major city, at $4.02 per gallon.
by John Keller | May 24, 2011 | Industry News
The American Petroleum Institute reported that in April 2011, total demand for distillate fuel rose 15 percent to 4.27 million barrels a day, while consumption of ultra-low sulfur diesel fuel increased 26 percent to average 3.42 million barrels a day.
Gasoline pump prices rose 6.6 percent last month, which slowed demand 2.2 percent to 8.91 million barrels a day from the same month last year.
Fuel demand increased in April as economic growth fueled diesel consumption by truckers, Bloomberg reports.
This article was reported by NACSOnline here.
by John Keller | May 16, 2011 | Industry News
According to an article on MarketWatch, several companies reported retail fuel sales in April were as much as 4% lower than in March. The article specifically mentions Marathon Oil Corp., Tesoro Corp., and Delek US Holdings, Inc.
High fuel prices were to blame for the drop in fuel volume, according to the company statements. Read the entire article here.
In this shrinking fuel market environment, Fuel Managers must fight for volume market share by investing in fuel price management solutions that allow for constant monitoring of competitor pricing, fuel replacement cost, optimization strategies, volume history vs. target, and price change processes.
by John Keller | May 13, 2011 | Fuel Price Management, Fuel Price Optimization, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
There’s a great MSNBC news article out today discussing the role of the US Federal Government in helping fuel prices trend downward. The key takeaway for the Fuel Price Manager is that fuel prices are going to continue their downward trend of recent days. From a Fuel Price Management perspective, that means it’s a critical moment to invest in fuel pricing solutions that allow the continued monitoring of wholesale costs, and the competitor fuel price reaction. As cost drops, now is the time to increase retail fuel profits, while carefully managing the gradual fuel price decreases that the consumer expects.
News agencies are making it common public knowledge that retail fuel prices are quick to rise when wholesale costs increase, and slow to drop when wholesale costs decrease. But these agencies are setting customer expectations for retail fuel prices to drop over the coming months. That means people will be looking for price decreases, and will be quick to jump on them with a fill-up when they see a well-advertised price.
Here are highlights from the article:
- Oil prices have peaked and appear to be coming down.
- After flooding the financial system with cash for more than two years in an effort to stabilize financial markets and economy, the Fed is getting ready to turn off the taps. The anticipation is one reason oil prices are coming back down.
- For all of the complex forces acting on the global oil market, the dollar has a powerful sway for the very simple reason that oil is priced in dollars. The dollar has begun showing signs of strength. Just as a weaker dollar helped send oil prices surging, a stronger dollar is reining them in.
- The forces that drove prices higher seem to have reversed course. Global growth seems to be slowing. The dollar is strengthening. And the inflation threat from the Fed’s easy-money policies may be easing.
- Until the outlook for oil prices becomes clearer, expect more daily price swings that will send even the most seasoned traders looking for cover.
The full article may be found here.