How to select the prime location for your next gas station

With the availability of retail space reaching its lowest point in decades, competition for new gas station locations is fiercer than ever. Businesses need to make fast decisions and have the conviction to push forward with expansion plans before the competition can act.  

But site selection decisions come with huge investments and selecting the wrong site can have a detrimental impact on the future performance of your gas station.  

A high traffic count is no longer a guarantee of a successful gas station. Of course, high traffic figures are great, but they aren’t enough on their own. With falling fuel demand in some areas, shifting customer expectations, and competitor diversification — there are many factors that can make or break a successful gas and convenience store. 

Fortunately, with robust data, gas station owners can understand the potential of any given location before making an investment decision. 

• Dirt strength – calculating site potential 

The dirt strength of a site is impacted by two factors: location and market.  

A good location has high traffic levels, excellent visibility from the roads, and easily accessible ingress and egress. Traffic counts are readily available and accessibility and visibility are easily evaluated with the naked eye.  

But a great location offers more. Is it well situated in relation to a retailer’s ideal customer base and their habits — where they live, work, go to school, run errands, and play? 

Every gas and convenience retail site exists in the context of a broad competitive landscape. This competitive environment has a huge impact on the potential of a gas station location. A site with high demand and minimal competitors has far higher potential than one whose demand is already being surpassed by multiple discounted hypermarkets.  

Successful gas and convenience retailers understand their competitive position and can identify how and where they can beat the competition – and therefore who they are comfortable neighboring. It’s important to analyze site potential in the context of your existing business. What could be a great location for one company may be completely wrong for the next.  

With Kalibrate’s 7 Elements framework you can quickly analyze the potential of any given site – to inform decisions about new build gas stations as well as acquisitions, site optimization and divestment.   

• Reliable sales and fuel volume forecasts 

Fuel volume projections and store sales forecasts should underpin gas and convenience investment decisions.  

By simulating a new to industry (NTI) site build, taking all site characteristics into account and assessing them against the demand from the consumers within the trade area, Kalibrate can provide reliable fuel and store volume forecasts.  

Gas and convenience retail decisions makers can quickly compare one location to another to understand which is likely to have a bigger impact on network performance.  Alternatively, compare different site footprints to understand how each element of a site changes its profitability. Is it beneficial to sacrifice parking spaces for a bigger store? Will a car wash attract more customers and generate higher volumes than additional fueling positions?  

• The impact of NTIs  

Kalibrate’s volume projections can shed light on the positive impact of building a new gas and convenience store — but what detrimental effect could a new site have on your existing network?  

Quantifying how a new site will impact current store performance will help ensure that your expansion plans will bring a high enough ROI across your full network of sites. If sites are situated close together, some volume loss from existing sites is to be expected. But once that volume loss breaches the acceptable level, your NTI site may no longer be viable.  

Kalibrate’s fuel volume projections calculate the impact on all local sites – including competitors. It will show you how many gallons and what percentage of total fuel sales every local site is expected to lose. This allows you to see which competitors will feel the biggest impact, and whether the volume loss at your existing sites is within the acceptable threshold.  

The gas and convenience retailers that can quickly assess location and market potential, expected fuel volumes and sales forecasts, and the impact on their existing network are in the best position to act quickly and decisively on new locations. Securing the best sites ahead of the competition is critical when space is limited.  

Kalibrate Fuel Planning gives you the information you need to make better location decisions that drive up fuel and c-store performance.