by John Keller | Aug 30, 2014 | Fuel Price Management, PriceAdvantage, Retail Fuel Margins
The OPIS report today showed the average retail fuel margin across the US dropped for the third consecutive week, down $0.012 to $0.211 per gallon. The year to date average increased slightly to $0.185 per gallon, while average for the quarter dropped $0.004 to $0.245 per gallon. The six week average was down as well, hitting $0.251 per gallon.
From a fuel price management perspective, we can say that though the retail fuel margins have been on a downward trend heading into Labor Day, it has still been a strong summer and a strong quarter overall.
The average retail fuel margin this week is $0.042 above the equivalent Friday last year.
Last year this week proved to have the the lowest average retail margin of the quarter. From this point on, September 2013 showed a series of weekly increases, finishing the month up $0.113 to $0.282 per gallon. We’ll see if retail fuel margins this year can follow the same pattern and make for a robust Q3.
by John Keller | Aug 30, 2014 | Customer News, Fuel Price Management, Fuel Pricing Strategy, Industry News, PriceAdvantage
The Syracuse Post-Standard newspaper interviewed Kim Bowers, the CEO of CST Brands, which recently acquired the chain of Nice N Easy stores in New York. The full interview can be found here.
Ms. Bowers’ daughter attends Hamilton College and frequented the local Nice N Easy store. Her daughter would often email photos of the store to her mom and tell her how much she liked it.
Ms. Bowers’ said CST Brands was attracted to the change because Nice N Easy had such great community involvement, and outstanding customer support. She said Nice N Easy customers should expect no changes, other than some more product offerings from the CST Brands private label brand “Fresh Choices”. The CEO said that at CST Brands it’s common for the customer to come inside the store because of the relationship they have with the people inside the store.
From a fuel price management perspective, this customer service focus and attention to the community plays into strategies that may not need to provide the lowest fuel prices in town. Customers are willing to by fuel at stores they like – just like the old saying goes “People do business with people who they like to do business with.”
by John Keller | Jun 27, 2014 | Fuel Price Management, Fuel Pricing Technology, PriceAdvantage
As reported by CSPNet.com, gas taxes will change in California and Indiana on July 1.
In California, the excise gas tax will drop $0.035 per gallon from $0.395 to $0.36 per gallon for the 2014-2015 fiscal year, ending June 30, 2015.
In Indiana, the state will be switching from a prepaid sales tax on gasoline, which was collected from retailers, to a gasoline-use tax based on a rolling monthly statewide average that is collected from distributors. The tax rate could change from month to month depending on the average price for gasoline. For the month of July 2014, the tax will be $0.229 per gallon.
From a fuel price management perspective, it’s critical that all your fuel pricing systems can be quickly adjusted to adapt to the new taxes. PriceAdvantage is built with this kind of flexibility in mind, allowing you to make these tax changes to your system without having to call in expensive consultants and pay them to open the hood and make the changes.
Does the fuel pricing software you have make it easy to change tax rates?
by John Keller | May 29, 2014 | Fuel Price Optimization, Fuel Pricing Strategy, PriceAdvantage
Traffic patterns are typical most of the time. We build stores, sell stores and tear down/rebuild stores based on these typical traffic patterns. Traffic is important to us as we price fuel because we can take advantage of changes in traffic flows.
Seeing traffic changes is where we find extra pennies and gallons. Integrating Google Maps with our pricing process gives us the ability to have local eyes on traffic patterns caused by things like concerts, ball games, and road construction.
Take for example a scenario where a large employer on the Southeast side of town closes down. If you don’t live in the area, it may take six months before you learn that you are losing fuel volume to the one station across the street due to the traffic pattern changes. Because the local guy has known that the rush hour is no longer when the volumes are, he has moved up his price during the week still getting business from the locals without much of a volume hit given the reduced overall volume market size. Then he makes the most of the weekend traffic by pulling tourist traffic off the highway with a low price and a billboard sign.
With PriceAdvantage, we can be 600 miles away from a station and feel like a local by leveraging the traffic view. With Web traffic information at our fingertips we can see what’s happening right now, and immediately make pricing adjustments to leverage the patterns we see. In this way we can adjust pricing strategies for the short term, or make immediate pricing exceptions to strategies we have in place, and then execute those optimized prices to the street in time to take fullest advantage of what’s going on in the market right then and there.
by John Keller | May 23, 2014 | Fuel Price Management, Fuel Pricing Technology, Industry News, PriceAdvantage
According to the OPIS report today, the average US retail fuel margin dropped $0.06 per gallon this week to $0.188 per gallon. The year to date average is $0.162 and the Q2 average is $0.169 per gallon. The six week average is $0.178.
Current levels remain above retail fuel margins of last year for the third straight week. Last year at this time the average retail fuel margin was $0.124 per gallon. That’s significant because this holiday weekend traditionally yields a strong bump in retail fuel volumes, and this year the number of Americans travelling 50 miles or more is expected to be 1.5% higher than in 2013.
That means c-stores have the opportunity to show robust fuel sales and profits this month, as long as they manage their retail fuel business wisely, carefully monitoring the competition, optimizing the balance between margin and volumes, and quickly executing the best pricing strategies to the street.
by John Keller | May 9, 2014 | Fuel Software, Industry News, PriceAdvantage, Retail Fuel Margins
The OPIS report today revealed that the average retail fuel margin across the US jumped by $0.056 per gallon this week. That’s the largest jump since January 10. That’s also the third consecutive weekly increase. The average retail fuel margin is now $0.211 per gallon, the highest of the year, and the first time above $0.20 per gallon in 2014.
The year to date average is $0.156 per gallon, while both the quarter to date and the last six week averages are $0.152 per gallon.
The average retail fuel margin last year at this time was $0.144, so we are now $0.067 per gallon above this week in 2013. This is the first week we’re above the comparable week in 2013 since February 21.
Last year at this time there were two more retail fuel margin drops, so hopefully we can keep up the trend we’re seeing this year and make up for all those weeks when we were below the margins of last year.
