by John Keller | Aug 11, 2014 | Fuel Price Management, Industry News, Retail Fuel Margins
Susser announced their financial results for the quarter. Here are the highlights:
- Average gallons per store declined 0.4%. Sam Susser attributed the decline to the acquisition of the Sac-N-Pac chain of stores which have a smaller store size on average.
- After deducting credit card expenses, net fuel margin was $0.128 per gallon, compared $0.127 the prior-year. Sam Susser attributed the downward pressure on fuel volumes and profitability to additional competitor store openings.
It has been a tough quarter from both a volume demand and margin perspective. It will be interesting to see how these results compare to the CST Brands results to be announced August 12.
by John Keller | Aug 1, 2014 | Fuel Price Management, Industry News, Retail Fuel Margins
The OPIS report today revealed that the average retail fuel margin dipped $0.023 per gallon this week to $0.269 per gallon. The year to date average continued its gradual upward trend to hit $0.178 while the average for the quarter jumped $0.004 to $0.252 per gallon. The six week average continued its fifth consecutive weekly climb to hit $0.236 per gallon.
The current retail fuel margin average now stands $0.055 above the equivalent day last year. That makes four consecutive weeks that we’re at levels above last year.
So far we are tracking $0.059 per gallon quarter to date above the 2013 quarter to date at this time. Let’s hope this strong quarter can continue.
by John Keller | Jul 25, 2014 | Fuel Price Management, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
The report from OPIS today shows that with the $0.016 increase in the average retail fuel margin this week, the retail fuel margin level now stands at $0.292 per gallon, the highest in over 12 months. The last time we saw retail fuel margins above $0.290 was July 5, 2013 when the average retail fuel margin hit $0.302 per gallon, the highest margin of 2013.
This week marks the fourth consecutive margin increase, totaling an increase of $0.135 per gallon since June 27. We’re seeing a slow but steady rise in the year to date average, with the current year to date retail fuel margin being $0.175 per gallon. The average for this quarter is $0.248 and the six week average is $0.218 per gallon.
Last year at this time, we were at $0.176 per gallon. That means we’ve now seen retail fuel margins above last year for three weeks in a row. Interestingly, this time last year the average retail fuel margin up to that point was $0.177 per gallon, so we’re tracking nearly identically on an annual basis.
by John Keller | Jul 23, 2014 | Customer News, Fuel Price Management, Fuel Pricing Strategy, Fuel Pricing Technology, Fuel Software, Industry News, Retail Fuel Margins
According to an online article on the Barron’s site today, “CST Brands, one of the largest (c-store) operators, could ring up impressive gains for investors….Damian Witkowski, an analyst at Gabelli & Co., puts the private market value of the shares at $48. That’s nearly 50% higher than Tuesday’s close of $32.94. While that valuation gap might not close right away, in the next year the stock could jump 20% as earnings improve.”
Why is this analyst so bullish on CST Brands? Because of how well CST is managing the balance between fuel margins and volumes. “Since its spinoff from Valero ( VLO ) in May 2013, CST has been boosting fuel margins and opening new larger format stores under its Corner Store moniker…CST has been seeing success from its strategy. As an independent retailer of fuel, CST has been able to focus on improving fuel margins, rather than selling more fuel, as it had when it was part of Valero. In the March quarter, margins jumped 19% to 10 cents per gallon, from the same period a year ago.”
To what can we attribute this fuel price management success? PriceAdvantage, which CST Brands began implementing in July 2012, finishing the rollout by the end of that year. In the latest earnings report, retail fuel margins before credit card fees were$0.139 per gallon, up from $0.116 per gallon for the same period in 2013. Though volumes were down year over year, something easily attributed to the overall decline of fuel volumes in the industry, I wrote a blog article about the success CST Brands is seeing as they manage the balance between fuel margins and volumes.
The fuel team at CST Brands is a great partner of Skyline Products, both on the PriceAdvantage side and the Electronic Price Sign side. The CST Brands fuel team has worked closely with the PriceAdvantage team to help us develop the best-in-industry volume, margin, commodity, and competitor analysis interfaces. The benefit to the rest of the industry is that these interfaces are provided as part of the standard set of analysis views available with PriceAdvantage. These views are not custom one-offs that cause problems with future software upgrades – they are standard out-of-the-box features that pose no grief with upgrades.
We’re proud to work so closely with CST Brands, and look forward to including their ongoing wisdom and insight in future versions of the PriceAdvantage software.
by John Keller | Jul 18, 2014 | Fuel Price Management, Fuel Price Optimization, Fuel Pricing Strategy, Retail Fuel Margins
The OPIS report today revealed that retail fuel margins have risen for the third straight week. This week the average retail fuel margin is up $0.048 per gallon, reaching $0.276 per gallon, the highest retail fuel margin of the year, and the highest since September of last year.
The year to date average now stands at $0.171 per gallon, the highest since February 7. The six week average stands at $0.202, the highest of the year, and the highest since November 22 of last year.
So far this quarter is shaping up to have the highest average retail margin of any quarter this year. Currently the average retail fuel margin for the quarter is 0.252, a full $0.06 per gallon higher than the quarterly average at this point last year.
The equivalent day last year the average retail fuel margin was only $0.100 per gallon which means we’re currently $0.176 per gallon above last year right now.
Certainly these margins can’t last forever. But the savvy fuel analyst will make the most of these times when volumes are solid in the summer, and margins are higher than ever.
by John Keller | Jul 11, 2014 | Fuel Price Management, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
According to the OPIS report today, the average retail fuel margin is up $0.033 per gallon this week to $0.228. The Q3 average now stands at $0.212 while the six week average is $0.185 per gallon.
Today’s margin is the highest since May 16 of this year.
Last year at this time the average retail fuel margin stood at $0.171 per gallon. That means this week marks the first time we’re above last year’s margin since June 13, nearly a month ago.
From a fuel price management perspective, we can see the market using the downward trend of crude and wholesale fuel costs to seize the opportunity to “come down like a feather” and make up for lost margins in Q1 and Q2 of this year.
