Margin Madness Tips in First-Quarter Win

A 51% jump in CPG sets up best 1Q in seven years

Steve Holtz, Editor in Chief, CSP Daily News

NEW YORK -- When is March Madness not just a college basketball tournament? When it's a tremendous bump in retail gasoline margins that set a seven-year record.

That's the good word in Raymond James & Associates' latest C-Store Monthly Grab-N-Go report, which shows national retail fuel margins for regular unleaded gasoline jumped 51% year over year for the five-week period that ended April 1, 2013.

"Despite a tough start to 2013, industry gasoline margins reached a seven-year first-quarter record high," states the research report released April 16. "Though fuel margins for regular unleaded gasoline changed little year over year [for] January and February, national fuel margins accelerated into March and ended the quarter averaging 24% above year-ago levels, while diesel margins averaged 32% higher year over year."

The boost came on a "favorable decline in fuel prices" at the refinery and wholesale level. The depth of the change varied from region to region, according to the report.

  • In the Southeast, fuel margins for the five-weeks ending April 1 increased 9.1 cents per gallon (CPG) or 74% to 21.4 CPG, according to the report.
  • In Texas, fuel margins increased 8.5 CPG or 75% to 19.7 CPG.
  • And in the Midwest, fuel margins increased 5.7 CPG or 37% to 20.9 CPG.

Meanwhile, Raymond James reported "limited, varying demand growth" for motor fuels.

"The convenience store group witnessed flattish to negative fuel demand through 2013, and, despite the favorable decline in fuel prices through March, we see little reason to expect demand growth in 1Q13 as fuel prices rose through most of January and February," the report states. "That said, we believe demand trends varied broadly by region and operator."

For example, Susser Holdings, dba Stripes Stores, based in Corpus Christi, Texas, generated solid low single-digit fuel volume growth and mid-single-digit merchandise sale growth in the first quarter, while The Pantry, dba Kangaroo Express, based in Cary, N.C., noted a demand slowdown in January, and Casey's General Stores, based in Ankeny, Iowa, reported negative same-store grocery sales in February and March and flat to negative fuel volume growth.

Steve Holtz, CSP/Winsight By Steve Holtz, Editor in Chief, CSP Daily News
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