Why Retailers Couldn't Handle Gas Sales

Just a decade ago, major retailers—including Walmart, Costco and Sam's Club—were preparing not only to sell gasoline, but also to dominate that category. Convenience chains, for whom gas sales are crucial, were panicking. At the time, analysts predicted such chains could control one out of every four sales of gasoline by 2015. Bottom line: It didn't happen. It didn't even come close.

In a three-part series, CSP Daily News looked at fuel sales—which looked initially like such easy pickings—and how the big chains couldn't figure it out. "More than a decade has passed since those gloomy forecasts, and the c-store channel has more than survived. It's modestly thriving amid an extended economic malaise and expanded virtual world that combined have injured many in the FDMx (food, drug, mass) sectors and plunged a knife into big-box formats. As a result, the best—such as Walmart—are investing in smaller formats and forcing other previously top-flight operators to question their future," the story said. "Yes, the battle for fuel is still being waged between c-stores and (high-volume retailers). But for every Sam's Club or Safeway success, there is a Lowe's or Home Depot that ultimately failed at the gas game or pulled the plug on the idea."

Mike Lopez, a marketing research coordinator for Denver-based Energy Analysts International (EAI), is quoted describing the dynamics at play that overwhelmingly went against the major chains. "Right now, that idea of convenience is really going head to head with the idea of savings and discount," Lopez said. "Value seems to be more and more in the front of people's minds."

For more:  

- See the first part of the CSP Daily News series

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