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Resist raising prices to capture more margin at volume’s expense

By Joe Petrowski on Nov. 15, 2018

FRAMINGHAM, Mass. — Longtime managers in baseball have said the key to success is never giving up the big inning to an opponent. Instead, play for the big inning yourself. In fact, in 65% of baseball games, the winning team scores more runs in one inning than the loser scores in nine innings.

So it is in retail fuel marketing. While the average annual retail margin in the United States is 18 cents per gallon (CPG), the reality is that during the year we will swing from 5 CPG to 45 CPG and spend only 95 days at or around the 18-CPG average. A typical distribution will look like:

  • 95 days at 18 CPG
  • 180 days at 5 CPG
  • 90 days at 45 CPG
  • 365-day average: 18.6 CPG

While the 180 days at 5 CPG is painful, retailers must resist raising prices…

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Source: www.cspdailynews.com