It's been a full year since gasoline prices topped $5 per gallon, on average, across the United States. The steady rise over the previous 18 months—driven by the pandemic, the war in Europe and several other factors—kept consumers, and the petroleum retailing industry, on pins and needles: Just how drastic would it get?
Perhaps surprisingly, retail fuel volume actually remained flat in 2022, despite the record-high prices, according to NACS State of the Industry data. Chalk it up to a nation tired of being cooped up by the pandemic. Meanwhile, dollar sales, riding those high prices, increased 41.2% to a record $603.2 billion.
While those prices haven’t fallen quite as quickly as they rose, they have generally leveled off at about $3.65 per gallon heading into summer.
That’s been good for retail volume, as consumers returned to the roads in numbers nearing pre-pandemic levels. Before the Memorial Day holiday weekend this year, AAA projected 37.1 million Americans would take to the road, an increase of 6% over 2022. That’s an increase of more than 2 million motorists, though about 500,000 shy of pre-pandemic numbers.
It’s good news for the industry. But retailers face challenging same-store-sales hurdle rates for gasoline sales as the year-over-year period passes. You could see the issue raise its head in first-quarter earnings reports by the few public gasoline retailers out there.
Those reports show fuel margins are flat to down, while gallons sold are up.
| Retailer | Q1 fuel gallons (millions) | Gallons a year ago (millions) | Q1 margin (avg. cents per gallon) | Margin a year ago (avg. cents per gallon) |
| Arko Corp. | 248.9 | 239.6 | 35.4 | 37.5 |
| Casey's General Stores | 635.9 | 621.1 | 34.6 | 36.2 |
| Delek US | 40.0 | 39.5 | 26.6 | 31.4 |
Source: Q1 2023 earnings reports
What’s not up is dollar sales.
While it’s difficult to compare each retailer’s data because terminology in earnings reports vary, the four retailers cited above all reported a decline in gasoline revenue in Q1.
Casey's General Stores, for example, reported $219.7 million in fuel gross profit in Q1 compared to $224.6 million during the same period a year ago.
Meanwhile, Arko Corp. reported same-store fuel profit of $76.3 million in Q1 vs. $87.7 million in 2022, and Delek US Holdings reported $131.1 million in total retail fuel sales versus $139.9 million a year ago.
These are harsh comparables, and we can expect Q2 to be even more drastic as retailers compare revenue from the period of peak gasoline prices to today. That’s nearly a $1.50 less per gallon. Those reports will start rolling in early August.
It sets up a tough earnings period for most retailers—public or not. On the bright side, in-store sales remain strong across the industry. And, even better, once we’re past the comparable period, results should look much better in the second half of the year.
Just hold on to your hats for the short-term.