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Alexandria, VA – September
2018 / Newsmaker Alert / A
look at how convenience stores fuel America.
Store
Stats
While about half of the convenience stores selling gasoline are branded outlets selling a specific refiner’s brand of fuel, major oil companies have essentially exited the retail fuels business. About half of the fueling stations in the United States sell a brand of fuel from one of the 15 major refiners/suppliers, which often makes the signage touting a specific fuel brand seem like an oil company owns the store. Of the roughly 122,500 convenience stores selling fuels, less than 1% of them are owned by one of the five major oil companies as of July 2017. Overall, about 60% of the convenience stores selling fuel are single-store operators—more than 70,000 stores. Many of these small businesses may not have the resources to brand their stores separately from the brand of fuel they sell and promote on their canopies, often leading to consumer misperceptions that they are businesses owned and operated by a major oil company. Regular grade gasoline accounted for 86.8% of all gasoline gallons sold in 2017 (down 0.2 from 2016). Mid-grade accounted for 1.8% of gasoline volume (down 0.2 from 2016) and premium accounted for 11.4% (up 0.3 from 2016). In 1997, regular gas accounted for 71.6% of sales, mid-grade was 11.8% and premium was 16.6% (Source: U.S. Energy Information Administration, Prime Supplier Sales Volumes January-November 2017) Profit
Breakdown
Fuel sales account for approximately 60% of sales dollars, but fuel margins are still relatively slim and therefore fuels account for about 38% of total profit dollars at convenience stores. Due to the volatility in the wholesale price of gasoline and the competitive structure of the market, retailers typically see profitability decrease as prices rise, and increase when prices fall. On average, it costs a retailer about 12 to 16 cents to sell a gallon of gasoline. Using the five-year average markup of 20.7 cents, the typical retailer averages about 5 cents per gallon in profit. (Retailer costs to sell fuel include credit card fees, utilities, rent and amortization of equipment.) Over the course of a year, retail profits (or even losses) on fuels can vary wildly. In some cases, a few great weeks can make up for an otherwise dreadful year—or vice versa. State-Specific
Fueling
The states with the lowest percentage of stores selling fuel either have full-service fueling mandates (New Jersey and Oregon) or are in the Northeast. In those states, many stores were built before the early 1970s when motor fuels sales at convenience stores began to flourish. About
NACS
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