Sunoco enjoyed a rebound in revenue in 2022 but isn’t blind to the risks of growing competition.
Its annual report details what the Dallas-based oil company could confront in the future, including new competition from other locations offering EV charging ports. Sunoco distributes petroleum fuel products to 5,563 branded locations and has about 76 company-owned convenience stores.
- Sunoco is No. 87 on CSP's 2022 Top 202 ranking of U.S. convenience-store chains by number of company-owned retail outlets.
Sunoco provided a long list of possible competitors, from fast-food retailers to supermarkets, drug stores, dollar stores and club stores—not to mention other convenience stores and fueling centers.
Besides the price of fuel, Sunoco said site location, cleanliness, hours, store safety and brand loyalty will be factors affecting the company’s success in the face of growing competition. It has made the process of buying fuel easier with an integrated technology platform supporting a consumer app and an automated payment solution eliminating the need for a credit card for fleet customers.
If the Biden Administration hits its goal of 100% zero-emissions for federal vehicles by 2035 and continued incentives for consumer and fleet EV purchases, the actions could result in fewer visits to its convenience stores and dealer sites, Sunoco said in its report.
The domino effect could be “decreases in both fuel and merchandise sales revenue, or reduced profit margins, any of which could have a material adverse effect on our business,” the company said.
Besides incentives to move drivers away from fossil fuels, which would decrease demand for Sunoco’s core product line, the Inflation Reduction Act of 2022 could impose new costs for its operations by accelerating the transition to a low-carbon economy. The act includes a new methane emissions charge of $900 per ton of methane starting in 2024 and rising to $1,500 per ton in 2026. It’s designed to reduce emissions of greenhouse gases.
The company reported motor fuel sales revenue of $25.2 billion in 2022, up 47% from $17.2 billion in 2021. Its nonmotor fuel sales revenue rose to $370 million, up 21% from $306 million in 2021. The company’s net income dropped about 10% to $475 million, due to increases in operating costs and interest expenses.
The company’s retail stores operate under the APlus and Aloha Island Mart brands, and offer a variety of beverages, snacks, grocery and nonfood merchandise and other services.
It distributes Sunoco-branded and EcoMaxx-branded motor fuels to 5,563 Sunoco-branded company and third-party-operated locations in the United States and Puerto Rico. As one of the largest distributors of Chevron-, Texaco-, ExxonMobil- and Valero-branded motor fuel in the United States, it purchases motor fuel primarily from independent refiners and major oil companies and distributes it to more than 40 East Coast, Midwest, Southcentral and Southeast states, as well as Hawaii and Puerto Rico.