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High traffic• Good ingress and egress • LOCATION GO Sizable acreage • • Sophisticated buying • Below-market prices Focus on foodservice • SUPPLY • Guaranteed volumes Strong product assortment and variety • • Supply advantages Friendly staff • STORE Clean restrooms • Traveler-friendly “extras”• CSP’s inaugural ranking of Rewards programs • LOYALTY the most effective fuel Social-media presence • BY SAMANTHA brands spotlights a new era OLLER AND of convenience retailing ANGEL ABCEDE HOW TO PLAY Gasoline is one tough sell. ¶ It is purely functional— market efficiency, which OPIS calculates by divid- Fuel variety Use a combination of not fun. It is a necessity—not a choice. It is noxious, ing a brand’s market share by its outlet share. The • buying and pricing toxic and highly flammable. And the typical higher a brand’s market efficiency, the higher its • Adequate number of dispensers buying experience? Being forced to watch your per-store fuel volumes. ¶ While major oil dom- strategies and Bright lighting money disappear gallon by gallon, cent by cent. inates in market share, the Fuels 50 ranking is • retail offers to attract fuel ¶ And despite a short-term goose from low pric- topped by many of the industry’s “new era” re- Well-maintained pumps customers to your site. es, gasoline demand is hardwired to be flat or tail heavyweights: Wawa, QuikTrip, Sheetz and FORECOURT • The brands that diminishing in the long term, thanks to tough RaceTrac. These are private brands that recog- • Competitive prices sell the most gasoline fuel-economy standards and demographic nize and maximize the critical link between the Room to maneuver per location generate the trends. Those retailers who can coun- fuel island and the profitable store offer. ¶ “It’s a con- • Good ingress and egress highest market teract such forces and rack up the tinuation of something a lot of forward-thinking retailers have • efficiency and win highest volumes are the magicians realized: They might need to have alliances with major brands, and Sufficient parking of the fueling industry. But who are to make sure they have a panoply of companies to buy from,” says • the game. they, and how do they do it? ¶ For Tom Kloza, global head of energy analysis for OPIS, Gaith- its inaugural Fuels 50 ranking, CSP ersburg, Md. “But once you reach a certain critical partnered with Oil Price Information Ser- mass, you don’t necessarily need that major vice (OPIS) to present the most effective fuel brands flag—particularly if your business model is in the United States. That effectiveness is measured by more about getting people inside the stores.” 24 csp April 2017 April 2017 csp 25 Supply advantages, competitive pricing and a than 40 sites, Buc-ee’s market it considers as an appropriate strong store offer have helped retailers have the highest price efficiency is more than 3 points proxy for a brand’s total fuel Wawa generate one of the differentials in their markets. higher than that of the nearest volumes. Because of the data highest market efficiencies in (See them in the “Top 10 Low- fuel brand, and its gasoline was sourcing, the Fuels 50 ranking the country, after only Price Leaders” chart, p. 30.) priced a whopping 10.2 cents does not fully capture the 20 years in the fuel business. That said, the fuel brands per gallon below its market prowess of brands with small or topping the Fuels 50 ranking competition in 2016. no fleet business. For example, represent some winning “It clearly means the fuel Arco, which has a policy of formulas for boosting gallons: category is the carrot to attract cash-only fuel sales and few » SUPPLY ADVANTAGES. he real key people inside,” says Kloza, fleet sales, does not appear. With size and established high is driving gallons, which pointing out that Buc-ee’s was And Murphy USA’s Murphy volumes comes the ability to drives traffic to the store,” one of the first brands in 2016 Express brand, which has buy fuel several cents below says Mike Lorenz, executive to post $1.99-per-gallon earned a reputation for high the market wholesale average, vice president of petroleum gasoline when prices neared $2. volumes but has a small fleet and to tap into supply sources supply for Sheetz, Altoona, Pa., (Buc-ee’s declined comment business, ranks relatively low. formerly reserved for major oil. which has more than 500 sites for this story.) Also not captured in » OPTIMIZED LOCATIONS. and ranks fourth in market OPIS calculates market the market-efficiency data: Brands that drum up the efficiency. (See “Fuels 50” on share and volumes based on hypermarkets such as Costco, highest volumes have this page.) “Over a third of your Wright Express (WEX) fleet- which do not accept WEX engineered their locations to gas consumers will come into card transaction data, which cards. These aggressive fuel grease the fueling purchase your store, so the more traffic decision, with everything you can drive to the site, the from location to acreage and more people come in buying fuel variety playing a role. STATION MARKET MARKET OUTLET PRICE STATION MARKET MARKET OUTLET PRICE things at a higher margin.” RANK BRAND COUNT EFFICIENCY SHARE SHARE DIFFERENTIAL RANK BRAND COUNT EFFICIENCY SHARE SHARE DIFFERENTIAL » STORE POWER. The Fuels 50, which It’s no coincidence that the top 1 Buc-ee’s 31 8.86 0.25% 0.03% (10.20) 26 Pride 26 1.77 0.04% 0.02% (0.88) includes brands with 15 sites or Fuels 50 brands include many more, also features some small 2 Wawa 483 5.36 2.38% 0.44% (2.80) 27 Delta Sonic 26 1.77 0.04% 0.02% (6.94) of the industry’s savviest, most but mighty operators. Ranked 3 QuikTrip 733 4.71 3.18% 0.67% (2.79) 28 Go Gas 19 1.70 0.03% 0.02% (3.79) progressive retailers. A large first is Buc-ee’s, the Lake 4 Sheetz 516 4.10 1.95% 0.48% (0.97) 29 Irving 343 1.67 0.53% 0.31% (0.92) c-store featuring a high-quality Jackson, Texas-based brand 5 QuickChek 55 3.96 0.20% 0.05% (5.53) 30 Flash Foods 144 1.66 0.22% 0.13% (3.15) foodservice program and other best known for its sprawling high-appeal categories seals ( ) 276 1.66 0.42% 0.25% (5.03) fuel islands, 70,000-square- 6 RaceTrac 405 3.92 1.46% 0.37% 3.65 31 RaceWay the fuel-purchase deal for foot “c-stores” and award- 7 Royal Farms 132 2.95 0.36% 0.12% (2.29) 32 Family Express 65 1.62 0.10% 0.06% (0.68) many customers. winning restrooms. With less 8 Maverik 275 2.72 0.69% 0.25% (4.47) 33 Murphy Express 237 1.58 0.35% 0.22% (5.91) 9 Toot’n Totum 17 2.68 0.04% 0.02% 0.60 34 Byrne Dairy 33 1.58 0.05% 0.03% (1.76) 10 Spinx 56 2.53 0.13% 0.05% 6.04 35 Xtramart 31 1.56 0.04% 0.03% (0.33) ABOUT THE FUELS 50 11 Love’s 355 2.52 0.82% 0.33% (2.32) 36 AAFES 93 1.55 0.13% 0.09% (5.25) s the The Fuels 50 ranks fuel brands 12 NOCO 33 2.51 0.08% 0.03% 0.39 37 CEFCO 21 1.52 0.03% 0.02% (0.98) with 15 or more stores by market No. 2 Fuels 50 brand—and efficiency, which is defined as 13 Rutter’s 60 2.42 0.13% 0.06% 0.30 38 High’s Dairy 24 1.51 0.03% 0.02% (2.09) the perennial leader in OPIS’ market share divided by outlet 14 Pilot 430 2.36 0.93% 0.40% (4.92) 39 Rhodes 23 1.51 0.03% 0.02% 1.78 market-efficiency rankings of share. OPIS based volumes on chains with 50 sites or more— 15 2,664 2.25 5.52% 2.45% (2.57) 40 23 1.49 0.03% 0.02% (2.37) full-year 2016 national fleet-card Speedway Jiffy Trip Wawa has an approach to transaction data for all gasoline 16 Flying J 133 2.24 0.27% 0.12% (5.18) 41 Kwik Trip 441 1.49 0.61% 0.41% 0.30 fuel sales that is as effective as grades, which it considers an 17 GetGo 201 2.23 0.41% 0.19% (1.01) 42 Circle K 3,839 1.48 5.24% 3.54% (2.99) it is efficient. appropriate proxy for a brand’s total fuel volumes. A higher 18 Gate 73 2.21 0.15% 0.07% (1.15) 43 Giant 60 1.43 0.08% 0.06% (0.86) In November 2016, the market efficiency indicates stores 19 Thorntons 180 2.01 0.33% 0.17% (2.18) 44 Go Mart 115 1.37 0.15% 0.11% (0.80) chain opened its 500th with higher volumes, with an fuel location and sold its 20 average market efficiency of 1. 20 Fastrac 46 1.89 0.08% 0.04% (0.01) 45 Turkey Hill 239 1.35 0.30% 0.22% (2.12) billionth gallon of fuel—only Station counts are based on a 21 Road Ranger 52 1.89 0.09% 0.05% (1.47) 46 PDQ 33 1.35 0.04% 0.03% (2.14) 20 years after entering the brand’s weekly average for the 22 Parker’s 41 1.88 0.07% 0.04% (4.69) 47 Kwik Star 52 1.32 0.06% 0.05% (1.94) gasoline business.