NACS recently published the 2016 Retail Fuels Report, and it is full of fun statistics highlighting our great industry. Intevacon is proud to work with so many hard working, smart business men and women who keep gasoline flowing around the nation.
Many of you already know the numbers reported below, whether it be through an intuitive hunch or an objective observation. Here are a few industry highlights noted by NACS:
Price Per Gallon
Over the last five years, the annual average retail mark-up was 19.7 cents per gallon.
On average, it costs a retailer 12-16 cents to sell a gallon of gasoline.
Over the last five years, the typical petroleum marketer averaged about 5 cents of profit per gallon of gasoline sold.
72% of consumers use plastic at the pump.
Credit card fees comprise about 2-3%, and up to 4%, of a total purchase.
Credit card transaction and bank processing costs continue to exceed convenience store profits.
The average gross margin on fuel has averaged 6.2% before other expenses are considered.
The average credit card fee is about 6 cents per gallon.
Most merchants only make a few cents per gallon in pre-tax profit, sometimes even losing money on a fuel purchase.
Price is the main consideration for 64% of customers who need fuel.
Gasoline purchases account for 4-5% of consumer spending.
Convenience Store Numbers
Convenience stores account for 34.2% of retail outlets in the US (according to Nielsen).
There are 124,374 convenience stores selling motor fuels in the United States.
There are more than 154,000 convenience stores across the US.
Major oil companies only own about 0.4% of the 124,374 US convenience stores.
In 2014, the industry reported profits of $10.4 billion and credit card fees of $11.4 billion.
Liability shifted to merchants in October 2015 who were not able to accept EMV cards.
Fuel island terminals are required to accept EMV cards by October 2017 to prevent liability.
The average cost per store to become EMV compliant is about $30,000, and the industry will pay more than $3.9 billion to move to EMV.
Intevacon has also had a big year. We partnered with a record number of new customers, growing our site count to over 2,200 across the US. We also started testing the Intevacon Fuels Network with select customers. In 2016, we plan to roll out the full capabilities of our network, implementing an “Everywhere, not Everybody” approach, as well as providing full ACH payment capabilities to allow our customers to streamline their accounts receivables process.
We hope 2015 was a good year for you as well, and we trust that you are also excited about a big year in 2016. If you would like to reach out to us to discuss automating your fleet cards or getting involved with our network, please call 678-739-4450 or email us a email@example.com.
Can you believe that trade show season is about to start again?! It’s been a big year for Intevacon, and we can’t wait to meet with our petroleum marketers to discuss the Intevacon Fuel Network. Come say hi at one of the shows below or give us a call to discuss how we plan to implement our “Everywhere, not Everybody” strategy for the network.
Intevacon has long understood the value of a fleet card, and we are always excited to see our customers grow their fleet business and profit after adopting our system (see our favorite case studies here).
A recent Oil Express article further corroborated the value of fleet card accounts in its article titled “What a fleet card account is worth” (Vol. XXXVIII, Issue No 15). This article details how Sunoco is expanding its fleet card business by going after house accounts, noting that the top industries for fleet are lawn and garden, electrical, plumbing, heating, air conditioning, pest control, construction, roofing and freight transportation. Sunoco also suggests that retailers should provide discounts to their commercial accounts as a further means of gaining loyalty. Courting these fleet customers is well worth the effort—according to the Oil Express article, the sale volume generated by one new fleet customer is typically equal to that of 13 consumer customers. The article further expounds on the average number of gallons of fuel purchased on the fleet card, as well as the additional dollars that are spent inside the convenience store.
Intevacon’s petroleum marketers have always understood that house accounts are a valuable way to conduct business. While many of our customers do offer discounts to their fleet customers, this is not necessarily the norm. Many times, the relationship and extended credit between the petroleum marketer and his customer is enough to foster loyalty.The average fleet card transaction dollar value is higher than the average consumer transaction dollar value (13x more valuable according to Sunoco above). In addition, petroleum marketers using Intevacon save their margins by eliminating the transaction fee associated with traditional credit cards.
Last year was a good year for the convenience store industry. NACS released their 2014 industry statistics this week, and petroleum marketers ought to be feeling pretty good with the results.According to NACS, industry sales in 2014 reached $697.5 billion dollars with a record in-store sale total of $214.9 billion (a 4.6% increase from 2013). Gasoline prices were reported to be 4% lower in 2014 than the previous year, but the industry still saw an increase of 18.8% in fuel margins this year.This equated to an average of 22.2 cents per gallon in 2014 compared to 18.7 cents per gallon in 2013. With all of this growth, there is also opportunity for petroleum marketers to grow their lucrative house accounts and continue with positive growth into 2015. And there is no reason to give your profits away to the credit card companies and banks. Another article posted by NACS cites that the industry’s pre-tax profits of 10.4 billion dollars amounted to 1 billion dollars less than what the industry paid in credit card fees. With Intevacon, interchange fees are eliminated, and perhaps even more valuable for your fleet accounts, you are able to maintain a relationship with your customers.
Find out more about the Intevacon Fleet Card System by reaching out at 678-739-4450 or emailing firstname.lastname@example.org.
So far the trade show season has been a wonderful opportunity for Intevacon to connect with our current marketers and create new relationships with future partners. This is a really fun season for us, and we are excited for the opportunity to serve in this industry. As we travel across the country and interface with so many different businesses in the process, we cannot help but notice that there is a chasm between the companies who are in business to provide a service and the companies who are in business to increase revenues.
As everyone who flew to the last trade show can attest, the airline industry is a perfect example of an industry that has shifted perspective from focusing on its customers to focusing on its bottom line. Traveling by plane is no longer just the price of a ticket. There are now fees tacked onto every element of the experience—from baggage to seat selection. Delta made a move this week to revamp its reward system starting in January 2015. The new structure will prioritize “those sitting in the front of the plane, rather than the back-seaters,” as stated in an article published by MSN.
The most obvious aspect of this mentality is the absence of an honorable purpose. The agenda is no longer to serve the customer, but rather to take advantage of the customer at any opportunity. Intevacon endeavors in every exchange to benefit the marketer. Your success is our success. We want to be generous in our service, our pricing, our features, and our support. We are in business to serve you. Intevacon provides the best product in the industry, so why not also give the ultimate level of support to our customers who use it?
Delta’s prioritization of its high-dollar front seat customers over the “back-seaters” is an anachronism to the business model that we espouse. We know that our smallest customers depend on us the most. The success of their one or two sites means the success of their entire business. We also understand that our biggest customers need special TLC to get all of their processes aligned with the Intevacon system. We are equally invested in all of our customers, and we find that this approach fosters relationships that are both personal and gratifying. (For more, see our blog on “What Makes Customers Happy”.)
Intevacon is built on the principles of Integrity, Value, and Confidence. Our marketers are generous in their praise and recommendation of Intevacon, and we take pleasure in being generous in the benefits that we can offer to our marketers.
It’s getting close to our favorite time of year when we get to hit the road and meet with all of our favorite marketers. Below is a list of upcoming trade shows that we have scheduled so far. We’ll keep this list updated as we learn our booth number and any other information that would be helpful to connect. Let us know if you will be attending any of these trade shows so we can keep an eye out for you!