Consumers Hold Misconceptions About Fuel Retailers

ALEXANDRIA, Va. -- New research findings released today by NACS put a spotlight on convenience stores, fuel retailing and consumers' misperceptions about them, notably that retailers make 48 cents per gallon in profit after expenses. The reality is, they only make about 2 to 4 cents per gallon, according to the 2012 NACS Consumer Fuels Report.

Additionally, the majority of consumers don't blame convenience stores and fuel retailers for their pain at the pump. When given four possible explanations, only 9 percent of consumers said gas stations increasing profits is the reason that gas prices increase. By comparison, 35 percent cite speculation with oil traders; 26 percent cite oil companies increasing profits; and 19 percent cite supply and demand as the reason behind gas price increases. Eleven percent did not select a response, according to NACS.

The term "convenience store" is synonymous with the term "fuel retailer," with 80 percent of the gas sold in the country is purchased at a convenience store. However, consumers define the terms differently. For example, consumers think of convenience stores as local businesses or national chains, while they believe that gas retailers are an extension of a major oil company.

Consumers estimated that the major oil companies own 60 percent of the gas retailing outlets in the country, but only one in nine consumers (11 percent) said the major oil companies own convenience stores, according to the NACS report.

In reality, NACS said, integrated, major oil companies have their brand prominently on display (i.e., store signage, fuel canopy, the brand of fuel) at about half of all fueling stations in the country; less than 1 percent of these fueling stations are actually owned and operated by one of the oil companies.

"These results actually speak more to long-standing perceptions that are undoubtedly reinforced by signage at the pump," said NACS Vice President of Government Relations John Eichberger. "While less than 1 percent of all fueling stations are owned by the major oil companies, consumers see fuels businesses as affiliated with oil companies because half of the stations in the country sell a branded fuel and have signage that may reinforce their long-held misperceptions."

In a switch from a few years ago, this year's report found consumers are less willing to pay for renewable fuels than they once were, with a majority of customers saying they are not willing to pay more at the pump for renewables. In 2009, the NACS survey showed half of all consumers would pay more for renewables.

Among the 38 percent who said they would pay more for renewables, the highest price point they would be willing to pay is 13 cents more per gallon. It remains to be seen how this hypothetical scenario plays out with consumers overall remaining very price sensitive, NACS added.

One-third of consumers indicated they will be making a new vehicle purchase within the next three years, and they are considering a number of various non-gasoline-powered options -- especially dual-fuel vehicles. More than seven in 10 consumers (71 percent) responded that they would consider a hybrid electric vehicle and 38 percent of all consumers would consider a flex-fuel vehicle. Meanwhile, 37 percent of consumers would consider a plug-in electric vehicle and 35 percent would consider a diesel fuel-powered vehicle.

Those responses seem to follow along geographic lines. Consumers in the West are more likely than the overall population to consider an electric vehicle, with 91 percent saying they would consider a hybrid electric vehicle and 55 percent saying they would consider a plug-in electric vehicle, the report found.

Interestingly, NACS noted, there is a gender gap regarding diesel-powered vehicles. While 54 percent of male consumers say they would consider buying a diesel fuel-powered vehicle, only 15 percent of females say they would consider purchasing one.