Editor’s Note: The July issue of CSP Magazine tackles the growing problem of the decline in gasoline demand and the issues it’s causing retailers. This is the second of two online looks at how retailers are coping.
APPLETON, Wis. -- As gasoline demand slowly erodes, maximizing the forecourt experience is more important than ever. For U.S. Oil, one powerful tool to shore up business has been its loyalty program.
Based in Appleton, Wis., U.S. Oil, a division of U.S. Venture, has 35 company-owned and franchised Express Convenience Center sites and delivers fuel to around 700 independents.
“If we take a look at our stores, there’s no doubt over the last few years we’ve been seeing a 1% to 2% decline” in fuel sales, Steve Quinette, vice president of sales, told CSP Daily News. He noted, however, that some pockets of the chain’s six-state, Midwest footprint did see volume upticks in the last quarter.
“There are regions where the economy is starting to bounce back,” Quinette said, “so that has definitely helped. More people are working, so that gets people out driving and heading to work. They may have a few extra dollars of disposable income so that they can make a weekend getaway and do some things a year or two ago they wouldn’t have considered.”
That doesn’t mean demand isn’t down overall in its markets, however; Quinette expects, moving forward, a longer-term annual 1% to 2% decline.
“While people may be driving a few more miles each week, the new cars definitely do get better gas mileage,” said Quinette. “When the economy hit its bottom, people traveled less, and I think they planned out their trips better. I think that behavior has continued.”
Online sales are also eating into brick-and-mortar visits, he believes, helping to further erode gasoline sales.
With this in mind, U.S. Oil has doubled down on strengthening the tie between store and fuel, to maximize customers’ time when they are on the lot.
“There are more margins inside the store so we’re doing things to promote and get customers to actually get out of their car and come in,” said Quinette. He cited a foodservice promotion that offers two sandwiches or hotdogs for $3. “When they buy that two-for-$3 sandwich, they’re going to buy a fountain soda, chips, maybe some other convenience items that they wouldn’t have thought of,” he said.
U.S. Oil has also built up its proprietary loyalty program, Open Road Rewards, which offers 3 cents off each gallon of fuel with the purchase of an in-store promotional item. The program allows customers to accumulate the fuel discounts as they buy more items on promotion, to the point that some customers have essentially paid pennies for each gallon of gas. It’s a perk for them, and it ultimately helps U.S. Oil as well.
“Buying gasoline is such an emotional thing,” said Quinette. “If we can make it easier for that person to come in and not only buy gas but have convenient items and save money in the process, that’s helping not only our inside sales but our fuel sales with the additional frequency of stops by the consumer.”
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