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Retail Gasoline Market Snapshot Q3 2018

Posted by Jessica Nesterak on Oct 15, 2018 8:00:00 AM
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The third quarter of 2018 showed improvement in retail gasoline price margin performance compared to a year ago. Here are all the details.

Gross retail gasoline margins improved 1.9% to 21.8cts/gal in Q3 2018 compared to Q3 2017, according OPIS RetailSuite.

There were highs and lows throughout the United States, with clear winners and losers. Here’s a breakdown of 18 data points uncovered in our OPIS retail price database. We’ve organized them into Margins, Volumes, Market Share, Efficiency and Price Strategy.

Margins Show West Region Most Profitable

  1. The West had the best margins, with average rack-to-retail profits coming in at 25.4cts/gal versus 32.4cts/gal last year.
  2. Rounding out the top margin performers were the Northeast, with margins of 24.0cts/gal, the Great Lakes, at 22.1cts/gal, and the Midwest, at 18.3cts/gal.
  3. The Southwest had the lowest margins, falling from 18.6cts/gal last year to 16.2cts/gal this year.
  4. Oregon had the best margins of all the states, with profits averaging a whopping 48.3cts/gal, up 17.8% from last year.
  5. Delaware had the worst margins at just 9.9cts/gal despite a 37.5% increase from last year.
  6. The Top 20 Metros with the best margins were dominated by California, with 11 entries from the Golden State led by San Francisco, which had margins of an eye-popping 55.8cts/gal.
  7. The worst place to own a gas station was Elkton, Md., where average rack-to-retail margins were 5.2cts/gal in the red.

U.S. Gas Station Volumes Were Lower

  1. U.S. volumes were down, according to the OPIS survey of nearly 15,000 stations, by 1.7% versus the July-September period in 2017.
  2. The West was off the most, with a decline of 2.7% followed by the Southeast with a drop of 2.3%.
  3. The Northeast had the smallest drop, with throughputs declining 0.7%. The Midcontinent and Southwest were down 1.6% and 1.7%, respectively.
  4. Massachusetts and Rhode Island were the only two states that OPIS publishes that saw increases in volumes, with demand up 0.5% and 0.1%, respectively.
  5. Florida was down the most, with a decline of 3.9%, in OPIS’ data. 

But Who Owned Market Share?

Wait. Remind me again, what is "market share?"

  • Market share = % of volumes sold by a brand in a given geography. 
  1. Shell had the highest market share of all the gas brands with 12.3% of all sales, but it was a decline from 12.9% last year.
  2. Exxon was second, followed by Chevron, Speedway, BP, Mobil, Sunoco, Valero QuikTrip and Marathon. 

Who Held the Highest Efficiency Ranking?

Hold Up. What does "efficiency" mean?

  • First off, outlet share = % of stations operated by a brand in a given geography.
  • Efficiency = Market Share/Outlet Share
  1. Buc-ees had the highest efficiency rating. 
  2. Wawa was second, followed by Quiktrip, Sheetz, Racetrac, QuickCheck and Maverik. 

And the Winner for Most Aggressive Price Strategy Goes To....

  1. Costco was the most aggressive retailer. During the third quarter, on any given day, the average Costco was priced 23.38cts/gal below their direct competitors, 8% more aggressive than Q3 2017.
  2. Chevron made up the opposite side of the pricing spectrum. The average Chevron station on a given day in the third quarter was priced 9.62cts/gal above the stations around them. 

The data in this blog was compiled using OPIS RetailSuite, a software database that allows retailers to monitor station profits, volumes and competition. Want to grade your station and kick your performance up a notch? Find out more.

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Tags: Retail Market, Gasoline