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 31, 2013 | Industry News
A recent Wall Street Journal article describes how another set of truck fleets are accelerating a shift to natural gas vehicles. The article specifically lists Lowe’s, Proctor & Gamble, United Parcel Service, and FedEx. New natural gas engines by Cummins Westport and Volvo AB are helping spur this shift.
Up until now, higher initial cost of vehicles, lack of natural gas vehicle suppliers, and the lack of a natural gas fuel station infrastructure has hindered the adoption of natural gas vehicles. But companies like ENN Group have announced plans to build a network of natural gas stations targeting long haul trucking companies. ENN Group is one of China’s largest private companies, and has already built natural gas stations in China. In addition, Clean Energy Fuels, founded by T. Boone Pickens, has a network of 400 natural gas fueling stations and is expanding across the US.
From a fuel pricing standpoint, this is yet another indicator that natural gas is on the horizon as a viable fuels product. It’s critical to monitor the progress of natural gas in each of your markets and decide when it makes sense to add natural gas to your product portfolio.
by John Keller | Oct 30, 2013 | Industry News
The US states of Washington, California, Oregon, as well as the Canadian province of British Columbia are now part of a climate pact that is intended to rein in greenhouse gas emissions and fight global warming.
What is the impact on retail fuel pricing? Part of the pact includes encouraging the use of electric vehicles in that geographical area. And that means two things: continued trending toward lower fuel volumes sold in those markets, and opportunities for c-stores to add electric charging to their product line.
Forward thinking c-stores like PriceAdvantage customer Spinx have been early adapters adding electric vehicle charging stations to their product portfolio back in 2010. The Spinx Company is focused on making life easier for their customers, and electric charging stations are part of that vision.
Retail fuel marketers in this area can either wring their hands as they see their fuel market continue to shrink, or they can embrace the change and offer electric charging stations to gain some of these new customers.
by John Keller | Oct 30, 2013 | Customer News, Fuel Price Management Solutions
The PriceAdvantage team would like to congratulate Parker’s on the grand opening of their 32nd store.
According to Convenience Store News, Parker’s celebrated the official grand opening of their new state-of-the-art location in Statesboro, Georgia. The 3,200-square-foot retail store is the third Parker’s location in Bulloch County.
Parker’s features its 1-Cent Wednesday Fueling the Community program at the Statesboro location. On the first Wednesday of every month, Parker’s sets aside one cent of every gallon of gas purchased to donate back to local schools.
Parker’s has been using PriceAdvantage for retail fuel pricing across all their stores since November 2011. Parker’s has added seven stores since then. The Parker’s PriceAdvantage implementation incorporates their Skyline electronic price signs, as well as their VeriFone POS system, PDI back office system, and GasBuddy OpenStore.
by John Keller | Oct 28, 2013 | Customer News, Fuel Price Management, Fuel Pricing Technology
Greg Parker can now add “Entrepreneur of the Year” to his growing list of awards and industry recognitions. The Savannah Area Chamber of Commerce has just named Mr. Parker the 2013 Entrepreneur of the Year. The Griffin Report named Greg Parker C-store Innovator of the Year earlier this year. Convenience Store News named him the 2013 Tech Executive of the year in April. In August this year Parker’s was named one of the fastest growing companies by Inc. Magazine. Greg is the President and CEO of The Parker Companies, and a loyal PriceAdvantage partner and customer.
Parker’s selected PriceAdvantage as their enterprise fuel software in November 2011. Since then, Parker’s has successfully been using PriceAdvantage in conjunction with PDI, VeriFone, and GasBuddy OpenStore to manage their entire retail fuel pricing lifecycle. “We are always looking for innovative solutions to increase our efficiencies in the store, allowing our store employees to focus on customers and enhancing their shopping experience,” Greg Parker said. “PriceAdvantage Enterprise does exactly that by giving us control over fuel pricing from headquarters, or from the field, streamlining our overall fuel pricing process, helping to maximize profits and grow our business. Parker’s stores strive to be recognized for quality products at competitive prices and now we can communicate our fuel prices faster and easier in a matter of minutes through PriceAdvantage and OpenStore, both at the store and online,” Mr. Parker said.
The PriceAdvantage team is proud to work closely with Greg Parker and The Parker Companies as each of us plays a key role in our mutual success.
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 22, 2013 | Fuel Price Management Solutions, Fuel Pricing Strategy, Industry News
Colorado Governor John Hickenlooper and Oklahoma Governor Mary Fallin publicly thanked General Motors for bringing to market a 2014 Chevy Impala bi-fuel model that will operate on both CNG and gasoline.
Last year 15 governors solicited auto manufacturers for CNG vehicles as an effort to reduce dependence on foreign oil, protect the environment, and save money on state fleet costs. “By transitioning state fleets to CNG cars, Oklahoma taxpayers stand to save thousands of dollars per vehicle on fuel costs”, said Governor Fallin.
The 15 states involved in last year’s CNG vehicle solicitation now have more than 17,000 mid- and full-sized sedans in their fleets. The new bi-fuel Chevrolet Impala will offer 150 miles of natural gas range while providing full gasoline capability for an additional long distance range.
There is no question that CNG is poised for growth in the fuels US market. When and where to introduce CNG into your fuels management strategy requires close monitoring of your markets. The c-store offering CNG in the right markets will benefit from higher retail margins for this new product.
by John Keller | Oct 22, 2013 | Customer News, Fuel Price Optimization, Fuel Pricing Strategy, Industry News
A USA Today article titled “Park, pump and pig out” touts the c-store trend of offering gourmet food. PriceAdvantage customers Parker’s, Rutter’s, and Sheetz are mentioned specifically, and Greg Parker is quoted briefly.
Here’s a clip from the article:
“We currently do $6 million in annual sales,” Parker says. “Our store was actually picked by TripAdvisor last year as the fourth-best restaurant in the city.”
That’s probably because the crab stew consistently wins awards. And the extensive wine list works well with the upscale Southern comfort foods served. Its charming, 6,000-square-foot space doesn’t hurt, either. A renovated automobile dealership from the late 1800s with Mediterranean-style architecture, it is certainly eye-catching, a place where you want to linger.
“Our head chef trained under the tutelage of her grandmother,” Parker says. “We all revere her food.”
I wrote another blog post about how Fuel profit optimization is most powerful when viewed as part of the overall gross profits of the store. In some cases, the advertised fuel price is strategically used as an advertisement to attract customers to the high margin food and store merchandise product offerings. In other cases, it is the quality food that drives traffic to the store, and customers will fuel up after finishing their meal.
No doubt overall store profitability needs to be measured in terms of fuel, merchandise and food. PriceAdvantage working in conjunction with PDI allows you to see the correlation between these three pillars of profitability, determine the market profile of each location with its specific elasticity between product categories, and optimize profits based on the synergy of all strategies working in union.
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 16, 2013 | Fuel Price Management, Fuel Price Optimization, Fuel Pricing Technology, Industry News
California plans to increase the number of hydrogen fueling stations in their state from 9 to 109 over the next ten years, according to PetrolPlaza news. Governor Jerry Brown signed the bill committing $20 million per year to build out the hydrogen fueling infrastructure.
Plans are in place to have 12 new stations in California by early 2014, and there is already funding for seven more stations. Auto manufacturers acknowledge this commitment is critical to the adoption of hydrogen vehicles they plan to introduce in the coming years. Toyota says they are on track to deliver a mass production hydrogen vehicle in 2015. Hyundai also plans to lease 1000 hydrogen cars in the US in 2015.
While this doesn’t mean petroleum fuels are going to be dethroned as the highest volume fuel product offered by fuel retailers, it does mean that in certain markets, particularly in California, it may make sense to look into a hydrogen station as part of the c-store overall branding. At least it projects a progressive image, and hydrogen is certainly going to offer much higher margins than traditional fuels, given the lack of competition and market maturity.
