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 23, 2014 | Customer News, Fuel Price Management Solutions, Industry News
Greg Parker, CEO of PriceAdvantage customer Parker’s, presented some entrepreneurship tips when he gave the keynote speech at the Hilton Head Island-Bluffton Chamber of Commerce’s Small Business Awards Luncheon yesterday.
According to Convenience Store Decisions, among his list of tips were two that directly related to PriceAdvantage fuel pricing software.
1) Create a Dashboard for Success. The Parker Cos. “worship data,” he explained. “We believe that success doesn’t just happen. When you make success measurable, you make it achievable.”
- PriceAdvantage provides Parker’s fuel analysts with SNAP Analytics that allows each store to be successful from both a fuel volume and margin perspective. PriceAdvantage is a critical part of enabling Parker’s to achieve their success.
2) Parker’s embraces technology. The company uses technology “to deliver the ultimate customer experience,” said Parker, and it is a critical tool to maximize sales and create a sense of community around the company’s brands.
- The Parker’s PriceAdvantage fuel pricing software solution includes a complete closed loop price changing process between PriceAdvantage, VeriFone Sapphire POS, Skyline electronic price signs, and GasBuddy OpenStore. Through this integrated process, every price change is automated and can be managed from headquarters, even to the point of seamlessly updating GasBuddy with the latest Parker’s pricing.
by John Keller | May 19, 2014 | Fuel Price Management, Fuel Pricing Software, Industry News
According to AAA, the number of Memorial Day vacationers driving 50 miles or more this year will increase 1.5% over last year to the second highest level since 2000. The report defines the Memorial Day travel period as Thursday, May 22 to Monday, May 26.
“As the economy continues to improve at a slow and steady pace consumer spending, disposable income, consumer confidence and the employment outlook are trending up which is welcomed news for the travel industry,” said Marshall L. Doney, AAA Chief Operating Officer.
There is a free AAA Mobile app for iPhone, iPad and Android where GPS navigation helps travelers map a route, find current gas prices and discounts, book a hotel, and access AAA roadside assistance. The gas prices displayed on the app are supplied by OPIS.
What does this mean from a fuel price management perspective? On a nationwide scale, fuel volumes should be higher than last year for the five day period of May 22 to May 26. If current retail fuel margin levels remain the same, the average retail fuel margin will be approximately $0.12 per gallon higher than last year over the Memorial Day weekend. That means we have the potential for significant profit improvements over last year for these five days.
It also means the savvy fuel retailer can make the most of this weekend by making sure the latest fuel prices are displayed on the gas price apps fed by OPIS and GasBuddy. PriceAdvantage customers such as Rutter’s and Parker’s will be using their integrations to make sure their prices are displayed prominently to the Memorial Day travelers.
by John Keller | May 16, 2014 | Fuel Pricing Strategy, Fuel Software, Industry News, Retail Fuel Margins
The OPIS report today showed the average retail fuel margin across the US improved for the fourth straight week, rising $0.037 per gallon to $0.248 per gallon.
The year to date average broke $0.16 per gallon for the first time since March 7, rising $0.005 to reach $0.161 per gallon. The quarter to date average broke $0.16 per gallon for the first time this quarter, hitting $0.166 per gallon. The six week average now sits at $0.168 per gallon, the highest level since February 21 of this year.
This week last year, the retail fuel margin average was $0.123 per gallon, a level where it remained the following week. That means the average retail fuel margin is now twice that of last year.
These are good times for the fuel retailer, where margins are gaining strength heading into Memorial Day weekend with its historical increase of volumes. But that doesn’t mean the fuel analyst can rest easy. There are still pennies to be gained and lost, and as volumes increase to peak levels during the upcoming vacation season, every strategic decision is amplified. You can’t manage what you can’t measure. Implementing a fuel price management solution like PriceAdvantage where you can quickly measure and analyze the wins and losses of the day, and then adjust strategies quickly, is critical to making the highest profits of the season.
by John Keller | May 16, 2014 | Fuel Pricing Strategy, Industry News
According to a recent NACS consumer survey of 1183 gasoline customers, more consumers are saying they’ll spend more money than otherwise expected this summer (25% of those surveyed) compared to less money than otherwise expected this summer (16% of those surveyed). In the midwest, 33% of consumers surveyed said they plan to spend more money than otherwise expected this summer, the highest percentage of any region in the US.
According to NACS, Americans are expected to average more than two summer vacation trips of at least two nights away from home, and the bulk of this travel will be by car. More than 8 in 10 consumers (84%) say that they will drive for a summer vacation.
In related news, CSNews reported that 2013 retail fuel volumes were up 1.6%.
From a fuel price management perspective, we can hope that the NACS consumer survey predictions hold true, and that retail fuel volumes will grow at least as much as they did in 2013.
by John Keller | May 16, 2014 | Customer News, Fuel Price Management, Fuel Software, Industry News
As reported by CSPnet.com, Flyers Energy made another acquisition, this time adding the commercial fueling, wholesale contracts and two convenience stores from Redding Oil Co., a fuel distributor based in northern California.
Flyers Energy is northern California’s largest fuel distributor, and continues to grow as it expands its operations throughout the Western United States.
Auburn, Calif.-based Flyers Energy franchises the Flyers fuel brand and distributes wholesale and branded retail fuel, commercial lubricants, renewable fuels and solar power in the United States. Flyers Energy is the largest member of Commercial Fueling Network and is also the marketer for more than 100 Chevron, Shell, Valero, and 76 branded stations. Flyers Energy offers commercial fueling at 230,000 retail gas stations nationwide with the Flyers Fleet Card.
Flyers Energy selected PriceAdvantage in 2012 to manage their fuel pricing process throughout their retail locations.
“PriceAdvantage allows us to automate our fuel pricing process while aligning our pricing strategy and improving communications across our network of sites,” said Tom DiMercurio, Director of Accounting at Flyers Energy. “Our goal is to leverage technology to reduce operating expenses and to provide a means of tracking the implementation of price changes through the whole process. PriceAdvantage is allowing us to accomplish both of these objectives.”
by John Keller | May 13, 2014 | Customer News, Fuel Price Optimization, Fuel Pricing Strategy, Fuel Software
PriceAdvantage customer CST Brands reported their earnings for their first quarter today. Here are the fuel highlights.
- Retail fuel margins before credit card fees were $0.139 per gallon, up from $0.116 per gallon for the same period in 2013. According to the weekly OPIS reports, average retail fuel margins across the US were down $0.001 per gallon compared to last year. That means CST Brands was able to beat the national average this year and gain margins. This is the goal of CST Brands according to previous financial reports, as CST Brands has shifted their fuel pricing strategy to focus on gaining retail fuel margins. CST Brands was once again successful in achieving that margin goal.
- Retail fuel volumes per site per day were 4,797 gallons compared to 5,048 gallons last year. That equates to a 4.97% decrease in gallons year over year.
Is this strategy shift to a margin emphasis working for CST Brands, given the loss of volumes? Let’s do the math. Suppose Q1 of 2014 had the same number of gallons sold in the US as Q1 of 2013. That’s a bold assumption, given that fuel volumes have been on a continual decrease for many years now, but for argument’s sake let’s use that assumption. Multiply the 2013 results of 5,048 gallons by $0.116 per gallon, and you get $585 in daily margin. Multiply the 2014 results of 4,797 gallons by $$0.139 per gallon, and you get $666 in daily margin. That’s an improvement in daily margin of $81. Multiply that by 90 days in the quarter by 1038 stores and you get an improvement of $7.57 million.
Clearly the fuel pricing strategy at CST Brands is working.
CST Brands, when they were under the Valero umbrella, worked closely with the PriceAdvantage team to develop a rich set of analysis views and reports so they could optimize their entire fuels business. Since rolling out PriceAdvantage across all their stores in 2012, CST Brands now reaps the benefit of this rich information in PriceAdvantage by implementing a winning fuel pricing strategy as proven by these quarterly results.
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.
by John Keller | May 6, 2014 | Fuel Price Management, Fuel Software, Industry News, Retail Fuel Margins
According to an article in Convenience Store Decisions, for the first time since February, the average fuel price for regular gasoline across the US is expected to drop. The author of the article is Brian Milne, Energy Editor for Schneider Electric, and he attributes the prediction to sliding gasoline futures, a drop in secondary wholesale costs, refiners returning units to service after an extensive turnaround season, a higher run rate at U.S. refineries, a continued growth in domestic fuel supply amid the boom in shale oil, and new pipeline capacity to the Gulf Coast.
However, since the US Energy Department announced there will be federal regional gasoline reserves created near New York Harbor and in New England this year in response to the disruption caused by Superstorm Sandy, Mr. Milne wrote that gasoline prices will find “upside pricing support” this summer.
The full article can be found here.
What does it mean to fuel analysts if this prediction proves true? It means retail fuel relief for the first time since February, and an opportunity for fuel retailers to catch up on their retail fuel margins. It means fuels demand possibly beyond the typical seasonal increases we see each summer. And it means some reassurance that if we get hit with another superstorm this year, we’ll be able to make it through without the dramatic impact we saw with Superstorm Sandy in 2012.
