Mondial Assistance conducted a phone survey of 1000 adults over age 18 in the US and issued a report that holiday travel will be up by 7% this year, from 50% in 2010 to 57% in 2011. Car travel makes up 56% of all holiday travel.
From a fuels price management perspective, this is an indicator that the upcoming holiday season is likely to have increased fuels volume sold as compared to last year.
In Spartanburg, SC, another fuel price war was initiated by a c-store grand opening. Promotional temporary fuel prices for a new QuikTrip caused a race to the fuel price basement. In response to the promotional pricing, the nearby Raceway and Kangaroo lowered their fuel prices, resulting in some of the lowest prices in the country, with unleaded fuel at one point hitting bottom at $2.80 per gallon. That was enough to cause unnatural traffic patterns to the point where state officials needed to be called in to solve the traffic problem.
This price war started over a month ago back in October, and still has a ripple effect in Spartanburg. GasBuddy reports as of today seven c-stores with unleaded fuel priced below $3.00 per gallon, with two stores at $2.83. The remaining 44 c-stores in Spartanburg are priced anywhere from $3.00/gallon to $3.35/gallon.
From a fuel price management perspective, it’s another lesson learned there is no substitute for fuel pricing analysts keeping up with local field market intelligence, and using human insight when setting optimized fuel prices. The retail fuel price market has too many unexpected influences that drive prices out of traditional patterns.
Retail fuel margins for the third quarter were 21.9 cents per gallon, versus 18.5 cents in the third quarter of 2010. For the first three quarters of 2011 retail fuel margins were 19.2 cents per gallon compared to 15.3 cents per gallon for the same period last year. Retail fuel volumes increased 7.9 percent from a year ago to 199.7 million gallons for the third quarter. That equates to 124,423 gallons per store per month on average. According to NACS, the average c-store sells 121,000 gallons of fuel per month annually. That means Susser stores sold about 2.8% more than the national monthly average.
Sam Susser, President and CEO said “We expect to continue to benefit from our geographic market focus in Texas, which is still faring better than many other parts of the U.S. due to our relatively stable housing market, continued strong population growth and robust job growth.”
The Company added five large format retail stores during the third quarter and closed two smaller stores, bringing the total number of retail stores in operation to 535.
For the 2011 fiscal year guidance figure, the report shows a range of $.15 – $.18 per gallon.
In their Q3 results, TravelCenters of America announced retail fuel margins of $.155 for the quarter and $.151 for the 9 month period. For the same periods in 2010 TA retail fuel margins were $.150 and $.136.
Total fuel sales volumes were up 1.8% from 2010 for the quarter and 0.9% for the same 9 months in 2010. The number of company operated stores is at 184, unchanged from 2010.
Retail fuels prices are expected to decline through the rest of 2011, according to today’s Short-Term Energy Outlook report from the US Energy Information Administration.
So far this year, regular unleaded monthly average gas prices have dropped $.46/gallon from their highest point in 2011 back in May, when the average fuel price for that month was $3.91 per gallon. The US monthly average fuel price for regular unleaded in October was $3.45 per gallon.
If the US EIA prediction proves to be true, from a fuels price management perspective these last 7 months of the year offer opportunities for fuel price optimization that will increase fuel margins and increased fuels profitability.
The announcement today from Alon Brands Inc. saying they will end the 51-year-old FINA fuel brand and replace it with the brand ALON is a case in point of just how dynamic the retail fuel pricing market is. From a fuel price management and fuel pricing strategy perspective, fuel analysts will need to carefully monitor the market reaction to this fuel branding transition.
Fuel Price Management software like PriceAdvantage is critical for allowing fuel pricing analysts to navigate their way through this transition, by monitoring the daily fuel volumes imported from PDI, tracking the competitor pricing strategies in each market from store surveys and OPIS, and adjusting fuel pricing strategies to maintain optimized prices at every store.
In their Q3 results, ALON USA announced retail fuel margins of $.159 for the quarter and $.167 for the 9 month period.
Average fuel sales per month per store hit 45,000 gallons for the quarter, an increase of 12.5% over the same period last year. ALON USA managed 303 stores throughout the quarter.
The US EIA today reported a third straight week of dropping retail fuel prices. Average fuel prices across the US dropped $.03 across the board for Regular, Midgrade and Premium this week. There were fuel price drops across every US EIA region, with the biggest price drop in the Midwest at $.05 this week. The US EIA report on a state basis showed only California had a price increase for Regular, with a $.01 rise to $3.85 this week.
The US average price for Regular has dropped $.05 per gallon from $3.47 on 10/17/11 to $3.42 today.
Tesoro reported in their Q3 earnings report that retail fuel margins were down $.06 from the same three months in 2010. In 2011 the three months retail fuel margins were at $.16 compared to $.22 for the same period in 2011. For the nine months ended this period, retail fuel margins were at $.18 compared to $.22 from the same nine months in 2010.
The monthly fuel volume per store for these three months was 114,961 gallons. The total number of Tesoro c-stores for this three month period is 1186, up from 880 in 2010.
For the 376 company-operated stores, average fuel sales was 169,326 gallons per month.
According to NACS, the average US c-store sells 121,000 gallons of fuel per month annually. That means over the past three months, Tesoro company-owned stores sold about 40% more than the US national monthly average, while dealer stores sold about 26% less than the US national monthly average.
Valero Retail Holdings, Inc., Valero Energy Corporation’s network of company-owned stores, has selected PriceAdvantage Fuel Price Management Software to manage and control retail fuel pricing for their one thousand Corner Store locations.
Long known for innovation and leadership in the Retail Petroleum Marketing industry, the Valero Corner Store team created their own in-house pricing application over 10 years ago. That application is approaching a technology end-of-life for the database. “We have been very successful with our own home-grown fuel pricing software, but it is time for us to add new functionality. After evaluating all available market solutions, we were pleased to find PriceAdvantage,” said Brian Skillern, Director of Fuel Transportation.
PriceAdvantage Fuel Price Management Software is a highly specialized retail fuel pricing solution for the Convenience Store industry. PriceAdvantage provides automation for the entire fuel pricing process, from collection of competitive surveys, to efficient and detailed analysis for best price determination, to rapid speed-to-the-street price change execution. It is this ability to change prices immediately at the Point of Sale, pumps and electronic price signs from the centralized headquarters location that makes the solution unique in the industry.
Aaron McHugh, Division Director says, “Valero is a best-in-class petroleum marketer, and we are excited to welcome Valero’s company-owned retail division as a customer and partner. Over the years we have assembled a team of software experts who are hyper-focused on creating easy-to-use and easy-to-deploy automated fuel pricing solutions. We are passionate about Fuel Pricing Software and we are pleased that Valero has recognized our system as the industry leading solution.”
Skyline Products, Inc. located in Colorado Springs, CO Skyline Products, Inc. has been delivering Enterprise class software solutions for over fifteen years. PriceAdvantage was birthed in 2005 in response to Retail Petroleum customer’s needs for remote price management from headquarters. In addition, Skyline Products, Inc. is involved in other vertical segments delivering both hardware and software solutions. Throughout America’s highways you will see both our Transportation (Intelligent Traffic Systems) and Petroleum (Electronic Gas Price Displays) solutions. Each industry is controlled with behind the scenes enterprise software solutions. For more information please visit www.skylineproducts.com or www.sellmoregas.com.
Valero Energy Corporation, through its subsidiaries, is an international manufacturer and marketer of transportation fuels, other petrochemical products and power. Valero subsidiaries employ approximately 21,000 people, and assets include 16 petroleum refineries with a combined throughput capacity of approximately 3 million barrels per day, 10 ethanol plants with a combined production capacity of 1.2 billion gallons per year, and a 50-megawatt wind farm. Approximately 6,800 retail and branded wholesale outlets carry the Valero, Diamond Shamrock, Shamrock and Beacon brands in the United States and the Caribbean; Ultramar in Canada; and Texaco in the United Kingdom and Ireland. Valero is a Fortune 500 company based in San Antonio. Please visit www.valero.com for more information.