Gas Stations

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 10,000 gasoline stations in the US sell automotive fuels, preferably at high-traffic locations, to individual motorists and fleets. Products sold include gasoline, diesel fuel, and gasohol. Other sources of revenue may include repair services, the sale of automotive oils, replacement parts and accessories; and/or providing limited food services.

Volatile Fuel Costs

With such low margins, gas stations have difficulty absorbing significant and sudden fuel cost increases.

Competition From Alternative Retailers

About 80% of all fuel sold in the United States is sold at convenience stores, according to the National Association of Convenience Stores.

Industry size & Structure

The average gas station employs about 9 workers and generates about $6 million annually.

    • The gas station industry consists of 10,000 firms with about 16,500 stations.
    • The industry generates about $99 billion annually and employs 147,600 workers.
    • Some retail outlets are owned and operated by refiners, while others are independent businesses that purchase gasoline from refiners and markets for resale to the public.
    • Most gas stations are independent operators with 1,262 individual proprietorships
                          Industry Forecast
                          Gas Stations Industry Growth
                          Source: Vertical IQ and Inforum

                          Recent Developments

                          Nov 11, 2022 - Among Generations, Gen Z Likes C-Stores the Most
                          • More than 90% of Gen Z consumers say they like the convenience store experience, according to a recent survey released by consumer packaged goods (CPG) research firm NCSolutions. Only 77% of consumers in other generations reported enjoying the c-store experience. More than half of Gen Z consumers said they would likely buy a product promoted by a convenience store on social media, compared to only 25% of other generations who said they would do so. NCSoultions suggests CPG firms can leverage Gen Z’s favorable opinion of c-stores to introduce products to the cohort.
                          • High electricity use fees and competition from utilities are slowing convenience store and gas station investments in electric vehicle (EV) charging stations, according to CNN. So-called demand charges are what electric companies charge commercial users when there is a high rate of electricity consumption over a short period of time, such as when an electric vehicle is recharged. Demand charges can account for up to 90% of a charging station’s electricity costs. In some markets, electric utilities have been given approval to raise consumers’ electricity rates to pay for the installation and operation of EV chargers. The National Association of Convenience Stores (NACS) argues that the combination of electric utilities’ demand charges while building their own EV charging stations amounts to unfair competition.
                          • At the National Association of Convenience Stores (NACS) convention in October, c-store owners and operators weighed the pros and cons of adding self-checkout as an option for customers. Self-checkout has been gaining traction in convenience and fuel retailing for some time but is still not widespread. However, investing in self-checkout stations has gathered more interest lately amid labor shortages and the effort to make transactions easier for customers. Detractors argue that self-checkout is a means to cut labor costs, not improve convenience. However, some firms who have added self-checkout say it’s not about reducing headcount but rather redeploying workers in ways that add more value to the store and customers. Industry insiders note that for self-checkout strategies to be effective, they must support all types of transactions, including fuels and age-restricted items.
                          • Nearly three-quarters of c-store executives feel their organizations need to be more nimble to experiment with new concepts and adapt to changing customer expectations, according to a survey by Incisiv and Toshiba. A majority of those surveyed said that high-quality, fresh food offerings would boost business; only 32% said they were content with the current quality of their fresh food. At the same time, executives were reticent to increase their fresh food investments, as only 30% said they planned to devote more space to fresh food, and only 25% said they were adding dining space. More than 80% of respondents said working with delivery apps was important, but only 27% said their firms allowed remote customers to see inventory digitally.
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