by John Keller | May 28, 2020 | Fuel Price Management, Fuel Price Management Solutions, Fuel Price Optimization, Fuel Pricing Software, Fuel Pricing Strategy, Fuel Pricing Technology, Fuel Software, Retail Fuel Margins
The PriceAdvantage team is excited to announce the general availability of PriceAdvantage version 2020.1.1. With this release, PriceAdvantage delivered an integration with GasBuddy Business Pages and improved the speed of importing PDI data. This version also improves the integration with Skyline signs. At the time of this post, we have already upgraded two customers, with many more customers scheduled to upgrade in the coming weeks.
This is our fourth release of the year. The PriceAdvantage team uses Agile software development best practices to rapidly build and deliver iterative releases throughout the year, always staying in close contact with the latest needs of our customers.
Please contact your Account Representative, or anyone on our Support team, to learn more about this new release, to schedule a demonstration, and to arrange for an upgrade. Upgrades typically take less than one hour.
by John Keller | Jun 9, 2016 | Fuel Price Management, Fuel Price Management Solutions, Fuel Price Optimization, Fuel Pricing Strategy, Fuel Pricing Technology, Fuel Software, Retail Fuel Margins
Convenience Store Decisions published the results of a study from Market Force that identifies the key factors that drive customers to select their favorite fuel retailers. Over 10,000 consumers were surveyed. Approximately 73% were women and 27% were men.
The results were split into two categories: Convenience Stores and Big Box (including grocery stores). When asked where did they last visit for their most recent trip to refuel, 71% visited a c-store, and 28% visited a big-box retailer.
The key determining factors for selecting a fuel retailer were
- Price
- Payment Options
- Fuel Quality
- Ease of Entering and Exiting
“The brands are tightly clustered in nearly every category, which shows just how fiercely competitive this industry is,” said Cheryl Flink, chief strategy officer for Market Force Information. “With drivers having so many options to choose from, gas stations and convenience stores must excel in areas beyond price, such as offering multiple payment options or specialty foods to attract loyal, repeat customers.”
What does this mean from a fuel price management perspective? When determining fuel pricing strategies, the strategy of gaining volumes simply by offering low prices may not be the best way to optimize overall store profits. Take into account the competitive strengths and weaknesses of each location in terms of the consumer determining factors listed above, and see if the market will bear higher margins based on what the store has to offer. Use fuel pricing software like PriceAdvantage to experiment with different strategies. Execute the fuel pricing strategies so you can be sure every store is always priced where you want it to be all the time. And monitor store results with fuel volume and margin analysis, the correlation between forecourt and in-store transactions, and competitor behavior such as which competitor is first to lead and which typically follows.
PriceAdvantage allows you to deliver retail fuel excellence, and develop loyal customers who are delighted to recommend your stores to others.
by John Keller | Feb 23, 2016 | Fuel Price Management, Fuel Price Management Solutions, Fuel Price Optimization, Fuel Pricing Software, Fuel Pricing Strategy, Fuel Pricing Technology, Fuel Software, Industry News, PriceAdvantage, Retail Fuel Margins
Here we are heading into the end of February and everyone in the retail fuels business knows the season of rising gas prices is just around the corner. It happens every year: refinery prices increase, wholesale costs go up, and eventually the retail fuel marketer must respond.
We’re already seeing signs of this season being upon us. According to the Lundberg Survey, the average unbranded rack price for Regular Unleaded across the US has risen over seven cents since February 10. In the Midwest, the regional unbranded rack price average has shot up almost $0.23 per gallon in ten days. Yet refiner margins are still low, and pressure to increase margins continues to build .
Demand is higher year to date than 2015. That makes sense because in 2015, total US miles traveled broke a new record at 3.1 trillion miles. That record has stood since 2007, before the recession started. This number reflects miles traveled by passenger vehicle, bus, and truck. All indications are that 2016 will continue with similar numbers.
What does this mean to the Retail Fuel Manager? I recently spoke with one of our customers who manage a large number of locations across a number of dramatically different markets. He said that as he sees big increases in wholesale cost like what has happened recently in the Midwest, he’s faced with playing a game of chicken. Retailers are looking at each other to see who is going to move first. In order to be most effective in this retail fuel pricing game, you must go beyond simply responding to replacement cost and competitor price changes. You must have access to retail fuel pricing software that quickly shows you historical fuels volume performance for a store and market, compared to budget targets. You must be able to quickly see actual fuels margins store by store and across a region. You must be able to track past history of your prices vs. competitor prices, to get a sense of typically who moves first. And of course, the best retail fuel pricing strategy is a well executed fuel pricing strategy: once you determine the proper price for each grade at each location, you must be able to execute those prices out to the street across all locations.
One could say that recently it was relatively easy to make money in retail fuels because of falling wholesales prices and healthy margins. But as we head into the spring, this is when times get tougher and it takes more insight and faster response times to maximize retail fuel and overall store profits.
by John Keller | May 26, 2015 | Customer News, Fuel Price Management, Fuel Price Management Solutions, Fuel Price Optimization, Fuel Pricing Software, Fuel Pricing Strategy, Fuel Pricing Technology, Fuel Software, Industry News, PriceAdvantage, Retail Fuel Margins
Kocolene, an operator of 22 Fast Max stores throughout Indiana and Kentucky, experienced a 3% increase in 2014 fuel volume sales after just one year of using PriceAdvantage fuel pricing software – exceeding the national average increase by 2%. At the same time, the fuel retailer was able maximize fuel margins to create a substantial increase with overall gross fuel profits. The 2014 performance improvements are featured in a recent case study alongside other organizational benefits derived from using PriceAdvantage mobile fuel pricing technology. The case study may be found here.
In early 2013, Fast Max executives realized their manual, tedious processes for obtaining market data and setting fuel price changes needed updating. By adopting PriceAdvantage mobile fuel pricing technology, Fast Max was able to replace manual phone and paper processes for collecting competitive fuel prices, gained immediate access to accurate competitive information and market data, and automated price changes from headquarters to the store POS system and fuel price signs.
Within the first year of using PriceAdvantage, Fast Max increased its fuel sales and productivity. PriceAdvantage allowed Fast Max to quickly and easily catch developing trends in the market, signaling when an adjustment in their pricing strategy was needed to capture fuel sales. “Using PriceAdvantage, we have seen a 3% gain in fuel volumes over the previous year while maximizing margins and experiencing significant growth in gross profits. On top of that, we have a relationship with PriceAdvantage that feels more like a partnership.” Lance Gentry, Vice President of Operations.
By using PriceAdvantage mobile fuel pricing software, Fast Max corporate management reviews data, receives alerts and makes price changes on their smart phones, as well as perform many functions without having to call each store and interrupt a team member or manager who may be assisting customers. PriceAdvantage streamlined the entire pricing process and provided store managers and team members more time to service and sell to customers, as well as perform other tasks.
Fast Max chose the PriceAdvantage subscription pricing model that provided rapid software implementation with minimal upfront costs or hardware investments. This flexible model allowed Fast Max to license specific software components, enabling them to create an affordable solution to meet their specific needs. With the demonstrated increase in sales, PriceAdvantage easily delivered a measureable ROI.
by John Keller | Mar 14, 2015 | Fuel Price Management, Industry News, Retail Fuel Margins
According to an article in the Wall Street Journal today, the International Energy Agency announced Friday that US oil output was “surprisingly strong” in February, rapidly filling all available storage tanks. The agency said that US supply continues to “defy expectations”.
The reason is this: while independent shale-oil producers have slashed their planned 2015 spending on drilling by $50 billion year over year, they are increasing production on their best oil fields. Total US crude oil production again hit a high for the week ending March 6, reaching 9.4 million barrels a day.
And now many of these oil producers are adopting a new strategy that allows them to store oil in the ground, wait for the market price to rise again, and then quickly flood the market again. They simply drill the wells, which accounts for roughly 40% of the cost of the well’s total price, and then cap it until the right time when they can justify the remaining 60% investment to bring the oil to market. Plus many of these companies are betting that when it is time to produce from these capped wells, the services cost will be lower. This US oil under ground provides that much more storage beyond what is in the tanks above ground.
Add all this together and we see a scenario where it’s unlikely to have dramatically increasing oil prices anytime in the near future.
by John Keller | Feb 20, 2015 | Fuel Price Management, Industry News, Retail Fuel Margins
According to the Wall Street Journal today, we have an ongoing debate as to whether or not oil prices have hit rock bottom.
On one hand, we have seen the price of crude increase recently and now oil prices are back up above $50 a barrel. Oil producers in the US are reportedly cutting back on drilling, where the weekly count of rigs drilling for oil has dropped to the lowest level since August 2011, and oil companies have announced plans to lower their future spending. Aramco, the Saudi Arabia owned oil company, has announced they are considering cutting their future spending on production and exploration by up to 25%.
On the other hand, the US Energy Information Administration just announced that oil inventories increased by 7.7 million barrels in the week ending February 13. Their report said the US is on track to hit a 42 year high this month. Here we have an indication that output is not yet cutting back. And we’re in the middle of the annual February – March cycle where demand is at its lowest. In other words, oil supply continues to outweigh demand. Certainly it appears that in the near term, production will continue to keep us in an oversupply situation.
The ongoing US refinery strikes are three weeks old now, without any impact on gasoline prices. Refineries are hurt by roughly 200,000 barrels a day by the strike, and that amounts to a little over 1% of the daily US consumption which is 19 million barrels a day.
What does that mean from a fuel price management perspective? We’re seeing the traditional upward trend of springtime wholesale prices, along with upward trending retail fuel prices, and downward trending retail fuel margins. Gasoline futures also continue to rise. What remains to be seen is whether or not fuel volume demand repeats the strong numbers seen at the end of 2014. Retail fuel pricing competition remains strong, and the business is not for the weary. Retail fuel pricing software like PriceAdvantage is the way to the competitive edge.
