Three actions to unlock gas station potential in a decreasing market
A global reduction in demand for petroleum is putting pressure on US gas stations. The US Energy Information Administration (EIA) reported that the pump price has continued to trend down. The national average price for gasoline has dropped $0.488 in the past year, with diesel dropping by $0.662 per gallon.
Profit margins on gas are already low, so now more than ever, fuel retailers need to turn their focus to their adjacent offerings to drive income.
With changes in consumer behavior set to stay, it’s a great time to analyze your fuel retail offering and take action to unlock your site’s potential.
- 1. Assess your convenience offering
The changing market means new fuel retail opportunities are materializing. NACS, a global trade association for the fuel and convenience retail industry, reported that in response to the COVID-19 pandemic, consumers are increasingly avoiding hypermarkets and turning to convenience stores instead. From a survey of 1,828 member stores in April 2020, it found that 52% saw an increase in grocery sales since the start of the pandemic.
When once a small store would only be used as a back-up option, your convenience store may well be your consumers preferred grocery location now. With consumers steering clear of big box retailers to avoid crowds and long queues, now may be the best time to reevaluate your customers’ needs. Stocking more fresh food, great coffee offerings, and local produce may well entice regular customers through your doors.
- 2. Evaluate your site in seven key areas
In our changing climate, fuel retailers need to provide the right services in the right locations to draw more customers in to stores. Your customer offering has never been more important.
Successful retailers must understand what customers want — beyond fuel — to meet a broader set of consumer needs. The aim for fuel retailers should be to entice consumers to their site — not two or three times a week, but two or three times a day — becoming part of their everyday routine.
After analyzing detailed site characteristics and performance statistics for over two million outlets in more than 70 countries, Kalibrate has identified 7 Elements for Fuel and Convenience Retail Success. Retailers need to fully understand the impact of all 7 Elements; Location, Market, Brand, Facility, Merchandising, Price, and Operations within individual sites and across entire networks to enable intelligent business decisions.
- 3. Understand your market share
Global and national trends can give insights into the state of the industry, but to get more meaningful insights for each of your sites, you must fully understand what’s happening in your local market, with particular emphasis on the competition.
How do you compare to your competitors?
If you understand your local competition and their strengths and weaknesses, you can ensure that you differentiate your offering and increase your market share. To establish true market effectiveness, you’ll need to know how your gas volumes and sales compare to others in your local market. With this information you can maximize your own strengths to improve your market share.
Learning about your competitors doesn’t have to be a guessing game. Reliable and accurate data is available to help fuel retailers properly understand their local market as well as their site potential.
Kalibrate has a wealth of experience and insight that you can use to understand your potential as a fuel and convenience retailer. Not only can it provide accurate forecasts for volumes and sales at a site, but your analyst will also provide custom commentary about the whole analysis — like a personal site consultancy service.
A full Single Site Analysis can forecast fuel volume, convenience store sales, quick service restaurant turnover, and car wash success at a given site location. Helping you to understand how to maximize the opportunities you have.
To learn more about Kalibrate’s Single Site Analysis, and how it’s leveraging new cutting-edge science – from Kalibrate Planning 3.0, watch this 15-minute video “All About Single Site Analysis”, created as part of Kalibrate’s virtual Fuel and Convenience Innovation Summit.
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