A Solid Year on the Forecourt

In last year’s Industry Report, Convenience Store News proclaimed that in 2014, “c-store fuel profits enjoyed one of their best years ever.” Motor fuel profit growth for 2015 could not keep up the lofty pace, but by no means should it be construed as a bad year at the pump.

Motor fuel sales per store did drop nearly 22 percent to $3.13 million per store last year. Gross margin cents per gallon also suffered a small decline to 23.40 cents per gallon, but this number is still robust on a historical basis.

All other indicators at the forecourt were strong, given the steep price decline. Gallons sold per store and therefore, gallons sold per store per month, both enjoyed a 3.6-percentage-point gain year over year. Gross margin dollars per store also ticked higher by more than 1 percent year over year to $284,625, although this number pales in comparison to the nearly 30-percent gain when 2014 results were reported.

“It would be unrealistic to expect a 30-percent gain in fuel profits two years in a row,” said Steve Montgomery, president of b2b Solutions LLC. “Much of that has to do with the math, as the base is now 30 percent higher than it was in 2013. Fuel margins have been down recently, but are returning to ‘normal’ levels. Unfortunately, normal levels are below and, in some cases, far below 2014 and even 2015 levels.”

The other story in 2015 was clearly prices at the pump, which were cut by nearly one-quarter year over year to an average price of $2.58 per gallon. Prices reached their low in the Gulf Coast region in January 2015, when the average price per gallon dipped below the $2 mark to $1.99. Conversely, the West Coast had the highest fuel prices throughout 2015, peaking in July when this region saw fuel prices balloon to an average of $3.58 per gallon.

“It would be unrealistic to expect a 30-percent gain in fuel profits two years in a row.”
— Steve Montgomery, b2b Solutions LLC