Considering downsizing? This case study highlights the impact on one gas station in Georgia

Our Single Site Analysis team recently undertook an analysis on a new to industry gas station, where the owner wanted to assess the impact of investing in different c-store sizes to understand the size that would enable the most profitable offering for their business and best serve their customers’ needs.
Considering downsizing? This case study highlights the impact on one gas station in Georgia

 

Getting the size of your fuel station right can often be a challenge. You don’t want to overspend on construction costs, but sometimes a larger site may be necessary depending on your location.  Our Single Site Analysis can help you analyze how the size of your site can impact the projected fuel volumes and c-store sales — through demographic, traffic, and competitor data.

Our Single Site Analysis team recently undertook an analysis on a new-to-industry gas station, where the owner wanted to assess the impact of investing in different c-store sizes to understand the size that would enable the most profitable offering for their business and best serve their customers’ needs.

This report was used to assist the owner in determining the right size of their c-store and how best to tactically price their fuel. The below table outlines the various scenarios the client wanted to analyze.

What did our analysis reveal?

The table shows the projected change in fuel volumes and c-store sales based on the given scenarios. As you can see, the owner did not change the brand for each tactic, to keep the comparison like-for-like, but they did change various other factors.

The base case tells us the projections per the owner’s current plan. Their current strategy had their fuel priced 2 cents below their closest competitor and they had chosen to build their c-store as a 3,700sq ft building.

We can see that the base case uses an independent c-store brand and is projected to achieve $93,000 per month in c-store sales and a projected 63,000 gallons per month in gas.

Over the three separate cases, the owner wanted to simulate the impact of a downsize in c-store. In case 2, the decrease in store size was set to 3,000sq ft – decreasing c-store sales by a projected 8% a month and fuel volumes by 6.5%. As suspected, a further decrease in case 3 to 2,700sq ft shows a deeper projected loss – a 10% decrease in c-store sales and fuel volumes.

In case 4, the owner attempted a different tactic where they downsized the c-store by only 200sq ft but changed their pricing tactic to match the competitor’s price to offset volume losses. As the table shows, this change created a projected 6.5% decrease in c-store sales compared to the base case, but the price match significantly lowered the gallons per month, compared to the base case, by 12% per month.

Not only does the Single Site Analysis allow the owner to test out various simulations for their site, but it also lets them understand the impact their site will have on their competitors’ projected volumes.

This analysis was able to tell us that the new site would draw a large portion of its fuel volume and c-store sales from a handful of immediate competitors’ sites, with 25,000 gallons and $50,000 per month directly coming from these locations. To learn more about the impact of your site on your trade area read about the 7 elements for fuel and convenience retail success.

These insights can help you understand the expected impact and drive a data-led approach to decision-making – you can trust that you are making the right decisions for your location, and help secure the investment you need to succeed.

The Single Site Analysis report allowed the owner to choose the right size for their site, allowing them to maximize return, adding to the success of this new to industry site.

The Single Site Analysis can provide a full analysis of any site’s trade area, competitors, and customers as well as fuel and store projections based on your suggested scenarios. Drive better decision-making with data. To discover more about how the Single Site Analysis can help you make the right investment decisions, request a free Single Site Analysis sample today and get started on your journey to success with Kalibrate.  

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