The American Petroleum Institute reported that gasoline deliveries, a measure of consumer gasoline demand, increased 3.0% to 9.0 million barrels per day, the second monthly increase in demand since February 2011.
From a fuel price management perspective, the fuel volume sales benchmark is higher year over year.
PriceAdvantage customer Sheetz opened another new store in North Carolina. The new store is one of ten new stores Sheetz plans to open in North Carolina this year.
Sheetz uses PriceAdvantage to manage their closed loop fuel price management process, including to their Skyline signs.
There is a growing list of articles in the press predicting that fuel prices are going to drop in the coming months. Both a AAA report and a report from the US EIA say fuel prices should begin to drop, with regular unleaded fuel leveling out to $3.95 per gallon.
Fuel prices for regular unleaded from April to September should be $3.95 per gallon according to the US EIA. Average prices for that same period last year were $3.71.
In the OPIS Retail Fuel Watch, OPIS reported retail fuel prices dropped $0.8 cents per gallon nationally, the lowest level since March 27.
The most common fuel price is $3.799, with just under 19% of the stores across the nation having fuel prices above $4.00 per gallon.
PriceAdvantage allows you to display in your fuel price management system OPIS Radius report information about specific competitor stores, so you can compare your prices to the competition and quickly react with price changes as needed.
According to the most recent MasterCard SpendingPulse study, fuel consumption declined 3% over the past 52 weeks. That equates to 4.2 billion gallons.
According to John Gamel, who oversees MasterCard SpendingPulse’s weekly consumption report, part of the reason for the decline is that people have purchased vehicles with better gas mileage. Average gas mileage is now 24 miles per gallon, compared to 20 mpg in 2008.
Experts agree this trend of declining fuel consumption is bound to continue. From a fuel price management perspective, it’s clear that as convenience stores continue to fight for an ever shrinking fuel market, competition will continue to be tough. Only the c-store chains with the most effective fuel pricing technology will survive.
This information was reported by Convenience Store News in an article here.
The March 2012 issue of NPN magazine and www.NPNweb.com has a great article about the strategic importance of the integration between electronic price signs and fuel price management systems. Stewart Spinks, CEO of The Spinx Company, and long time PriceAdvantage and Skyline sign customer, is featured in the article.
“We can move very quickly as costs change,” Spinks says. “Some suppliers do multi-day changes. Central cost monitoring and speed of price changes can ‘signal the street’ of our desire to pass on increases or decreases to the market. If competitors don’t react within two hours, Spinx can react expediently. Furthermore, the staff does not have to stop serving customers to physically go ‘post the prices.’”
With PriceAdvantage and Skyline electronic price signs, Spinx has a comprehensive closed loop fuel price management solution, allowing fuel price optimization from cost and competitor price monitoring at the store and at HQ, to rapid deployment of those prices, optimized for each market.
The full NPN online article may be found here.
In the March 21, 2012 issue of the Convenience Store News Special Features > Business Focus, the section “Issues and Leaders with Don Longo” is an interview with Greg Parker of The Parker Companies, a PriceAdvantage customer.
The Parker Companies uses PriceAdvantage in the cloud for their fuel price management of 27 convenience stores in South Carolina and southeast Georgia. In the interview, Don Longo lists fuel price management software among the key industry-leading latest technology programs in place at The Parker Companies. Mr. Parker explains how critical managing the price of fuel is to the business, given the current market conditions.
Longo: Please comment on the most significant developments relating specifically to the convenience industry.
Parker: As the number of stores increases and the overall consumption of gas decreases, there is greater competition in our industry than ever before. Gas consumption has decreased by 4.5 percent as consumers drive more fuel-efficient vehicles and become more mindful of their driving habits in light of high gas prices. Everyone is fighting for a greater market share, which means everyone has to get better at what they do. To me, this is an inspiring development in our industry because it forces everyone to step up their game.
The CSN interview may be found here.
According to CSP Daily News, the convenience store industry is facing the lowest retail fuel margins in years. Lower retail fuel margins so far in 2012 are a result of wholesale fuels costs rising more rapidly than retail fuels prices.
During the last week of February 2012, retail fuel margins were the lowest in over two years.
“Estimates of January retail fuel margins by publicly owned c-store companies showed gasoline margins for the month decreased 15% compared to the previous year…”. The article continued “National retail fuel margins averaged 12.9 CPG for the month of January, down approximately 2.3 CPG year over year.”
From a fuel price management perspective, it’s clear there is only one way to stay afloat: carefully monitor the daily and even hourly changes in fuels costs, monitor competitor retail fuel prices hourly, and quickly implement fuel price changes to optimize retail fuel margins. C-store chains relying on the outdated methods of spreadsheets, emails and phone calls simply can’t keep up with today’s wildly dynamic retail fuel pricing environment.
The original CSP Daily News article may be found here.
We’re now in a time of survival of the fittest, where only the strongest c-store chains in the retail fuel business will survive. An article in Convenience Store News today references the sale of another c-store chain, this time one that had been in business for 27 years. The original owning family cites a completely business environment – gas prices and competition are up, but fuel margins are down.
From a fuel price management perspective, this sale is just one more indicator of how tough it is out there, and how much an effective fuel price management solution is needed. Without a complete fuel price management technology solution to effectively monitor and manage volumes, competitor and store pricing, and daily retail fuel margin, a chain simply can’t compete. It’s too tough of an environment to take too long to respond to competitor and cost changes, and to miss the retail fuel margin windows of opportunity.
While it’s one thing to come up with what the fuel prices should be at each of your stores, it’s completely different to know when the price changes actually took effect. What good is it to know what the prices should be, when the prices don’t hit the street until 5 to 7 hours later, and you’ve missed your window? Fuel price change confirmation is critical to the entire fuel price management cycle.
The Convenience Store News article may be found here.
According to the US EIA, average unleaded retail fuel prices across the US rose another $0.04 a gallon this week. Once again, hardest hit was the Rocky Mountain PADD region where average unleaded fuel prices rose by $0.15 to $3.623 per gallon. After having fuel prices more than $0.25 per gallon lower than the next lowest region for much of this year, the Rocky Mountain PADD region has now almost caught up to the Gulf Coast PADD region after rising almost $0.30 over the last two weeks, and now is only by $0.07 the lowest PADD region in the country.
Only one PADD region in the country has average unleaded retail fuel prices over $4.00 per gallon, the West Coast PADD region with average unleaded fuel prices of $4.234.
