Despite higher demand, the industry will lose customers to gas outlets with on-site stores
Los Angeles, CA (PRWEB) October 26, 2012
The Gas Stations industry is expected to generate revenue of about $133.5 billion in 2012 after annualized revenue growth of 1.6% over the five years to 2012. Overall, though, lower sales volumes offset the higher gas prices that favor the Gas Stations industry's revenue growth. According to IBISWorld industry analyst Antonio Danova, during the recession, consumers pulled back on expenses and drove fewer miles, leading to the lower sales volumes. In turn, major oil companies, which own a substantial share of industry locations, shut down or sold locations to focus on high-profit regions. This reorganization has hampered the potential for faster revenue growth. However, a resurgent postrecession market has fostered consecutive years of growth, with an expected revenue increase of 2.8% in 2012.
Even with recent significant activity from key downstream markets, the industry is losing sales to its larger sister industry, the Gas Stations with Convenience Stores industry (IBISWorld report 44711). Consumers are increasingly favoring gas stations with on-site convenience stores. Likewise, gas station owners prefer having convenience stores on-site because they provide products that typically have higher profit margins per purchase than gas. On-site convenience stores also benefit owners because marked-up pricing on convenience items tend to pad profit margins. Additionally, convenience store products experience less volatility and, therefore, provide steady income for operators. “The shift among consumers and owners to gas stations with convenience stores has dampened the industry's prospects for the next five years,” says Danova. Industry revenue is highly sensitive to trends in oil prices, which depend on global supply and demand. Oil prices are forecast to increase over the five years to 2017 as the pace of global economic growth picks up, with growth in demand outpacing growth in supply. Customers will absorb price increases as they return to the road and consumer spending rises. Higher oil prices will flow through to gas pricing and drive industry revenue up through 2017. However, the industry is still anticipated to remain in the decline phase of its life cycle as more consumers and businesses choose gas stations with convenience stores than those without.
Concentration in the Gas Stations industry is low as the top four major companies in the industry will account for roughly 29.5% of industry revenue in 2012. The large size of the US market (both in terms of volume and sheer area) contributes to the relatively low industry concentration. Although some industry participants have nationwide coverage, others are active only in specific geographic regions. For example, one of the industry's largest players, ChevronTexaco, has the bulk of its gas stations in the South, Southwest and West regions of the country. Another substantial industry participant, Marathon, focuses its activity in the Midwest and the Southeast. As a result, concentration can skew toward a more moderate level when viewed from the perspective of particular regions. For more information, visit IBISWorld’s Gas Stations in the US industry report page.
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IBISWorld industry Report Key Topics
This industry comprises gasoline stations that retail automotive fuels, offer repair services and sell replacement parts and accessories. Gas stations that operate with a convenience store on the premises are included in a different industry, Gas Stations with Convenience Stores (IBISWorld report 44711).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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