by John Keller | Nov 5, 2013 | Customer News, Fuel Price Optimization, Fuel Pricing Strategy, PriceAdvantage, Retail Fuel Margins
In the second quarterly financial report since spinning off from Valero, CST Brands reported a successful quarter of effectively implementing fuel pricing strategies that balanced fuel margins and fuel volumes. These strategies varied according to the market profile of the store and the corporate goals of that store, offering an ideal model of how to manage retail fuel pricing right.
Kim Bowers, CEO of CST Brands, explained that in this quarter CST brands used a fuel strategy that sacrificed fuel margins to build volume and traffic at their new stores (categorized as NTI, or New To Industry stores). CST Brands used an opposite fuel pricing strategy for their established stores to optimize margins, without the concern of potentially sacrificing fuel volumes. This is where the retail fuel pricing strategy gets even more interesting: this fuel margin optimization strategy at established stores did not seem to have an effect on in-store merchandise sales. That means CST Brands is earning more overall profits at these stores, which of course is the ultimate measure of success.
Kim Bowers said in the analyst call “At our new stores, we look at balance, pushing volume from time to time to generate traffic. For our legacy stores, we have to strike a balance between margin and volume. We need both. At those stores, we’re more focused on that optimal balance. It’s a corner-by corner-analysis.”
Under the Valero name, CST Brands selected PriceAdvantage as their sole retail fuel pricing software for all their stores in 2011. They completed the full implementation in 2012. The PriceAdvantage implementation is a complete closed loop process that includes OPIS Radius Reports for competitor surveys and competitive analysis, PDI volume and cost information for performance analysis, PriceAdvantage Optimization for retail pricing guidance, VeriFone POS and Skyline electronic price signs for seamless price change execution, and retail fuel price publishing to the web via GasBuddy OpenStore.
The PriceAdvantage team is proud to have CST Brands as a strong partner and customer and to share in our mutual success.
by John Keller | Nov 4, 2013 | Industry News, Retail Fuel Margins
OPIS reported a $0.055 jump in retail fuel margins across the US this week. Retail fuels margins across the US now stand at an average of $0.249 per gallon. That increase brought the retail fuels margin year to date average to $0.190 per gallon and the Q4 average to $0.223 per gallon. The six week average is holding steady at $0.233 per gallon.
Average retail fuel margins are nearly back to levels last seen at the beginning of October.
This same week in 2012, retail fuel margins were at an astounding $0.368 per gallon. But that didn’t last. Over the course of November 2012, average retail fuel margin levels dropped four straight weeks from $0.368 to $0.167 per gallon.
Let’s hope history doesn’t repeat itself and retail fuel margins can hold steady at current levels.
by John Keller | Oct 25, 2013 | Industry News, Retail Fuel Margins
According to the latest OPIS report, the average US retail fuel margin ticked up $0.011 per gallon to $0.194 per gallon. That reverses a three week trend of consecutive declines.
The year to date average remains at $0.189 per gallon, but the quarter to date average dipped to $0.217 per gallon. The six week average is $0.232 per gallon.
The average margins this week are a solid $0.12 per gallon lower than this week last year, when average retail fuel margins stood at $0.357 per gallon.
There are only nine weeks remaining in the year. Average retail fuel margins for calendar year 2013 are likely to stand at current levels given the short time left. In 2012, the retail fuel margin for Q4 ended at $0.230 per gallon. But Q4 this year is off to a much slower start than last year, so unless we see a dramatic turnaround in the next few weeks, we’re likely to see a lower average margin for the quarter than last year.
by John Keller | Oct 21, 2013 | Fuel Pricing Strategy, Industry News, Retail Fuel Margins
The latest report from OPIS reveals that retail fuel margins across the US had their largest weekly drop in two months. Overall retail fuel margins across the US dropped $0.053 per gallon to an average of $0.183 per gallon. That is the third consecutive weekly drop that combined to erase all margin gains achieved during the month of September.
The year to date average margins remain at $0.189 per gallon but the Q4 average margins dropped two cents to $0.225. The six week average retail margins now stand at $0.235 per gallon. This week one year ago retail fuel margins were nearly identical to this year, at $0.230 per gallon. Last year the latter half of October had an increase of $0.13 per gallon, followed by a $0.20 decline through the month of November.
It will be interesting to see if the patterns of 2012 repeat this year.
by John Keller | Oct 11, 2013 | Fuel Pricing Strategy, Industry News, Retail Fuel Margins
The latest OPIS report reveals that retail fuel margins across the US dipped $0.019 per gallon this week. Average retail fuel margins across the US are now at $0.236 per gallon, the lowest levels since September 13. The year to date average retail margin is $0.189 and the quarter to date average margin is $0.246 per gallon. For the last six weeks, the average retail margin has been $0.233 per gallon.
Two weeks into the quarter, we’re off to a strong start. Let’s hope that we can maintain margins at this level and finish the year strong.
by John Keller | Oct 4, 2013 | Industry News, Retail Fuel Margins
The latest OPIS report reveals that average retail fuel margins across the US reversed their four week trend, dipping $0.027 per gallon to $0.255 per gallon. Throughout the month of September, average retail fuel margins across the US rose $0.111 per gallon from $0.171 per gallon to $0.282 per gallon. The drop this week nearly offsets the increase in average retail fuel margins from last week, but still leaves the average fuel margin at the highest level since August 16.
The year to date average retail fuel margin across the US increased $0.002 to a strong $0.188. The six week average retail fuel margin is $0.221 per gallon.
These fuel margins are at the highest level of any opening week for each of the three quarters this year.
These numbers seem to indicate that while fuel retailers across the US used September as their opportunity to take advantage of falling costs, the competitive environment is now leading to price drops that allow for maintaining volumes.
