Company News

Margin Makers

Survey confirms 12.7-cent-per-gallon average, but range still wide

OAK BROOK, Ill. --A recent CSP Daily News Poll asked readers to compare their current gasoline margin to the 12.7-cent average per-gallon margin reported by the National Association of Convenience Stores (NACS) in its 2005 State of the Industry (SOI) Survey.

The results bear out the association's number. Of the 255 readers who participated in the survey, most respondents (22.7%) said their current margin was between 10 cents and 13 cents. Next, 22.4% put their margin between seven cents and nine cents, while 16.5% said their margin was 14 cents or more.[image-nocss]

Some 14.5% said their margin was between four cents and six cents; 8.6% put their margin between once cent and three cents; 0.4% said their margin was zero; and 1.2% said their margin was less than zero. Meanwhile, 13.7% responded I'm not sure.

As reported earlier, NACS said there was a sharp drop in motor fuels gross margins in 2004. According to the association's SOI data, released last week at the NACS SOI Summit in partnership with CSP in Chicago, the figure fell nearly one cent13.70 in 2003 to 12.71 in 2004. Taking into account the cost of credit card fees and gasoline theft, gross margins on motor fuels dropped even morefrom an estimated 11.84 cents per gallon in 2003 to 10.46 cents per gallon in 2004. Looking at margins on a percentage basis, overall motor fuels margins dropped from 8.8% in 2003 to 7.2% in 2004, their lowest level since 1984.

The industry's motor fuels sales jumped 18.9% to reach $262.6 billion, 66.5% of total industry sales in 2004, NACS said. While customers continue to purchase most of their fuel at convenience stores, which sell an estimated three-quarters of all the fuel purchased in the United States, there are substantial shifts in how that fuel is bought and sold. As motor fuels prices rose to record levels in 2004 (which have since been surpassed by those in 2005), customers continued the trend of trading down octane levels. Sales of regular-grade fuel accounted for more than four of every five gallons (81.4%) of gasoline sold at c-stores and 76.1% of all motor fuels sales when factoring diesel fuel and other fuelsup from 71% in 2003. Premium sales dropped from 8.5% of total fuel sales in 2003 to 7.2% in 2004, while midgrade dropped from 10.9% in 2003 to 10.2% in 2004.

The percentage of large-volume motor fuels retailers continued to grow in 2004, said NACS. More than one of three (34.4%) of all stores sold 125,000 gallons or more a month in 2004, up from the 24.9% that did in 2003. Every other segment lower than that saw declines in percentages, the data revealed.

Want breaking news at your fingertips?

Get today’s need-to-know convenience industry intelligence. Sign up to receive texts from CSP on news and insights that matter to your brand.


More from our partners