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NPN Magazine April 2013

National Petroleum News (NPN) has been the independent voice of the petroleum industry since 1909 as the opposition to Rockefeller’s Standard Oil. So, motor fuels marketing and retail is not just a sideline for us, it’s our core competency.

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TOP OF THE NEWS profits only moved from 1.027% to 1.028% of total sales. Motor fuels continued to drive sales dollars, but in-store sales drove profit dollars. Overall, 71.5% of total sales were motor fuels, but motor fuels only accounted for 35.0% of profit dollars. Motor fuels gross margins decreased from 18.2 cents to 17.8 cents per gallon before expenses, and also dipped on a percentage basis, falling from 5.23% to 4.94%, the lowest that they have been on a percentage basis in decades. While sales and profits were strong, there are concerns for the convenience retailing industry. Total credit and debit card fees hit a record $11.2 billion and surpassed overall convenience store industry profits for the seventh straight year. Overall, card fees increased 1.5%, a much slower pace than the doubledigit increases that were routine the past decade. Passage and implementation of new debit card swipe fees limits played a significant role in reducing escalating card fees. However, card fees still were significant. Just looking at motor fuels sales, credit and debit card fees added 5.1 cents to every gallon of gasoline sold at convenience stores in 2012. Beyond card fees, several other expenses lines saw increase, led by health insurance costs, which rose 6.3%. The industry's bifurcation also continues, with a considerable difference between top quartile and bottom quartile performers. Top quartile performers had hot dispensed profits that were 4.4 times greater than those of the bottom quartile, prepared food profits 2.4 times greater than the bottom quartile, cold dispensed profits 2.3 times greater than the bottom quartile and packaged beverage sales that were 2.3 times greater than the bottom quartile. Of greater concern to all retailers, there was a major difference in sales and profits by quarter. First quarter sales and profits were considerably better than those of any other quarter, while fourth quarter sales and profits lagged behind the other quarters. Weather likely was a major factor in the sales and profits variations. The first quarter of 2012 was unusually warm and dry, which is conductive to growing April 2013 on-the-go sales, while the fourth quarter had much poorer weather and significant storms in densely populated areas, most notably Hurricane Sandy. The industry's 2012 metrics are based on the NACS State of the Industry survey powered by its wholly owned subsidiary CSX, the industry's largest online database of financial and operating data. Complete data and analysis will be released in June in the NACS State of the Industry Report of 2012 Data. n Pilot Flying J makes $165 million investment, drivers now enjoy 3,000 lanes of DEF at the pump Pilot Flying J now offers diesel exhaust fluid (DEF) at the pump at 3,000 fuel lanes across the U.S. Knowing it would make refueling easier and more convenient for professional drivers, Pilot Flying J first started offering DEF at the pump in 2009 and was the first retailer to do so. Considering those benefits for drivers well worth pursuing, Pilot Flying J has now invested more than $165 million in expanding its network of DEF at the pump. Pilot Flying J's 3,000 lanes offering DEF at the pump stretch across nearly 400 locations in 42 states and four Canadian provinces, and the company now offers more than twice as many lanes with DEF at the pump than its closest competitor. But the company isn't stopping there. Pilot Flying J plans to have DEF at the pump available at all diesel lanes by the fall of 2013. DEF is a nontoxic solution used in vehicles with Selective Catalytic Reduction (SCR) systems to reduce levels of NOx emissions. Diesel engines purchased after Jan. 1, 2010, require the use of DEF in vehicles using SCR technology to reduce emissions and meet the Environmental Protection Agency (EPA) 2010 tailpipe standards. DEF at the pump allows drivers to dispense the fluid conveniently from the fuel island into the DEF tank of their truck or vehicle. In addition to the convenience of DEF at the pump, all Pilot Flying J locations sell DEF in one-gallon and 2.5-gallon containers. n McKinney Petroleum Equipment to sell Vendgogh's "Gas Island Vending" Vendgogh (Cary, N.C.), the leading provider of "Gas Island Vending Solutions" announced that it has entered into a strategic partnership with McKinney Petroleum Equipment. McKinney Petroleum Equipment is a multi-state solution integrator to convenience stores. McKinney Petroleum Equipment will market, install and maintain Vendgogh's patented "Gas Island Vending" solution, which allows customers to purchase gas and a cold beverage, right at the pump, with a single swipe of their credit or debit card. In addition to McKinney Petroleum Equipment, Vendgogh has previously announced partnership agreements with Jones & Frank, Northwest Pump and Reliable Oil Equipment. Vendgogh's vending systems are currently installed at Kangaroo Express (Pantry), Murphy Oil, Douglass Distributing and other gas locations in the U.S. Vendgogh will be installing their first customer locations in Canada in the second quarter of this year. n New Shell research busts myths on American drivers' views about fuel efficiency For years, American car culture has influenced U.S. motorist behavior, affecting everything from what we drive to how we drive and maintain our vehicles. Shell announced results from a new national study that provides insight into current U.S. driver attitudes on fuel efficiency and compares them to those of drivers in other countries. The results counter some common myths about national views on energy use, revealing that Americans care about using energy resources wisely, understand the importance of fuel efficiency and want to learn more about how to save fuel. From this study's findings, Shell also announced the U.S. launch of Target One Million, as part of its Smarter Driving program. The goal of this initiative is to show one million people worldwide how easy it is to become more fuel efficient. NPN Magazine  n  www.npnweb.com

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