Gas stations with convenience stores will increasingly take market share from industry operators
New York, NY (PRWEB) October 07, 2014
The Gas Stations industry has experienced above-average growth during the past five years. As more Americans gradually returned to work, total vehicle miles increased, bolstering purchases of gasoline. In addition, as per capita disposable income continued to improve, some consumers traded up to premium fuel, which is priced higher than lower-octane fuel. According to IBISWorld Industry Analyst Andrew Alvarez, “Diesel fuel sales were supported by the strengthening retail and manufacturing sectors, which boosted demand for diesel from trucking industries, and the introduction of diesel-compatible passenger cars.” Consequently, IBISWorld anticipates industry revenue to increase at an average annual rate of 4.6% to $134.7 billion during the five years to 2014, including a 1.1% increase in 2014.
Despite an increase in revenue, industry profitability declined during this period due to higher prices for refined oil and increasing swipe fees, charged by banks and credit card companies. In addition to lower profit margins, gas stations experienced ramped-up competition from gas stations that operate alongside convenience stores. Other factors that curbed demand for lower grades of vehicle fuel include greater consumer adoption of hybrid and electric vehicles, which are more fuel efficient than regular passenger vehicles. As a result of declining profit margins and increasing competition, oil and gas companies, such as ExxonMobil, have divested some or all of their retail operations over the five-year period.
Industry revenue is sensitive to trends in oil prices, which depend on global supply and demand. Oil prices are forecast to increase during the five years to 2019; in addition, as the pace of global economic growth picks up, growth in demand will outpace growth in supply. Furthermore, as hybrid and electric vehicles become more affordable, more consumers are anticipated to purchase these fuel-efficient cars, further lowering demand for gasoline. Nevertheless, consumers are expected to absorb price increases as they return to the road and consumer spending rises. “During the next five years, higher oil prices are projected to flow through to retail prices and drive up industry revenue,” says Alvarez. However volume sales of gasoline are anticipated to decline as more consumers turn to competitive retail channels, such as establishments in the Gas Stations with Convenience Stores industry (IBISWorld report 44711).
For more information, visit IBISWorld’s Gas Stations in the US industry report page.
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IBISWorld industry Report Key Topics
The Gas Stations industry comprises gas stations that retail automotive fuels, offer repair services and sell replacement parts and accessories. Gas stations that operate convenience stores on their premises are included in the Gas Stations with Convenience Stores industry (IBISWorld report 44711).
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