Fueling the Pressure

Higher gasoline prices eating into in-store sales

Samantha Oller, Senior Editor/Fuels, CSP

OAK BROOK, Ill. -- With the many challenges facing gasoline sales volumes--from the overall economy to fluctuating prices to declining demand--one thing is clear, the result for retailers is a decrease in inside sales.

"During the last four years, higher gasoline prices have eaten into inside sales at convenience stores," one retailer told CSP Daily News as part of CSP's 2011 Outlook Survey. "Profit margins for tobacco products, drinks and candies have dropped. Making money on gasoline sales is definitely a losing proposition."

How gasoline margins have changed over the past year varied pretty evenly among retailers who responded to the survey. A very slight majority (33.3%) saw the same level of margins, 29.6% described them as "lower," and 29% said margins were "higher." This compares similarly to respondents in the 2010 survey.

"Petroleum sales are down; customer counts are down accordingly," said another retailer. "[We are] maintaining inside unit sales with minimal growth in dollar sales."

More than 18% of respondents plan to make a change to their fuel offering in 2012. Upgrading fueling equipment was the most popular choice, with 37% of those who sold fuel making that move. This is followed by changing fuel brands and upgrading the fuel island (both at 33.3%).

A smaller percentage has plans to invest in alternative fuels, with E85 and biodiesel (both at 14.8%) the top picks, followed by adding an electric-car charging station (11.1%).

Click here to read to complete 2011 CSP Outlook Survey report from the December issue of CSP magazine.