Racetrac Petroleum Competition
Now Viewing Racetrac Petroleum's competition in: Convenience Stores and Gas Stations
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Is the company adding new products to appeal to a particular customer market segment? -
What media does the store use for advertising? - TV is playing an increasingly important role in marketing both small and regional chains.
Does the company do market research to determine product mix? -
How does the company determine pricing for its products? - Many companies price products relative to prices at local supermarkets.
How many other retailers in the area also sell gas? - Cheap gas has become a popular way for other retailers to attract customers.
Competitive Landscape
Demand depends mainly on the volume of car driving, which in turn depends on economic activity. The profitability of individual stores is closely linked to location and product mix. Large companies have advantages in buying gasoline at bulk prices, but small companies can compete effectively by having superior locations. Annual revenue per worker is close to $300,000.
Full Industry Overview For Convenience Stores and Gas Stations
Business Challenges
CRITICAL ISSUES
Volatile Gas Prices - The wholesale price of gas can vary substantially throughout the year, making it difficult for retailers to maintain an adequate margin and requiring frequent retail pricing changes. Spot wholesale gas prices often vary by more than 10 cents per gallon in a month. National retailers are large enough to reduce costs by buying gas directly from major producers, while smaller fuel operators must buy through a regional distributor.
Competition from Mass Merchants, Grocers - The strategy of using gas sales and convenience items to draw customers into stores to buy higher-margin items is being copied by other retailers. Although laws prevent retailers from selling gas below cost, mass merchants can sell at very low prices because of substantial discounts from wholesalers.
Industries Where Racetrac Petroleum Competes
- Retail
- Convenience Stores & Truck Stops(primary)
- Gasoline Retailers
