While c-stores often highlight updates to the tech, foodservice and product mix inside their stores, gas prices and availability are still the main trip driver for a lot of convenience retailers. C-stores sell about 80% of all the fuel bought in the U.S., according to NACS data.
At the start of the year, GasBuddy predicted that average gas prices will continue to drop from their 2022 highs, averaging out at $3.22 per gallon this year, as compared to $3.33 last year.
While lower prices combined with less volatility are favorable to consumers, they could mean lower margins for operators. Pilot, Murphy USA and CrossAmerica Partners have all cited declining gas sales as a major challenge.
Here’s what some major c-store leaders and owners have said recently about fuel sales.
Murphy USA takes a hit on fuel margin volatility
Murphy USA’s full-year revenue last year dropped by $1.3 billion, or 6%, compared to 2023, according to the c-store retailer’s annual report. Murphy attributed the decrease in revenue mainly to lower average retail fuel sales prices.
This marked the second straight annual revenue decline for Murphy. Between 2022 and 2023, the retailer’s full-year revenue dropped 8.2%, which it also pinned on low retail fuel prices.
“Fuel margin volatility is the single greatest factor in the volatility earnings of the business,” President and CEO Andrew Clyde said during Murphy’s earnings call in February. “That’s one of the things we clearly lay out with our board as we establish our plan, our capital allocation framework for not just the coming year, but the next three to five years.”
Arko sees slight gains in gallons
Arko, parent of c-store retailer GPM Investments, saw its fuel earnings decline by $605.5 million, or 8.1%, during 2024. Same-store fuel contribution was also down over 7% last quarter, the company said during its earnings call in February, caused by a decline in gallons and lower fuel margins.
“Fuel margin volatility is the single greatest factor in the volatility earnings of the business.”
Andrew Clyde
President and CEO
Despite the drops, Arko’s leadership remains optimistic about its fuels’ performance moving forward.
“For fuel, we expect an increase in productivity will more than offset a decline in same-store fuel gallons, resulting in a low single-digit increase in gallons per average store compared to the year-ago period,” CFO Robert Giammatteo said during the company’s earnings call.
Casey’s seeing strength in a down market
Casey’s General Stores highlighted gas as a bright spot for the fiscal third quarter. Overall, “fuel gallons sold were up over 20% while stored count growth was up 10% versus the prior year, an encouraging sign that the economic impact of the stores we are building and buying is greater than the company average,” noted company CEO and president Darren Rebelez during Casey’s earnings call earlier in March.
Casey’s didn’t just see fuel sales strength from new stores, either.
“For fuel, same-store gallons sold were up 1.8% with a fuel margin of 36.4 cents,” said Rebelez, noting that an overall downturn in fuel sales in Casey’s operating region indicates the company is taking market share from competitors.
CrossAmerica Partners
The amount of CrossAmerica’s fuel sales that came from retail vs. wholesale was thrown off thanks to the company converting 49 former Applegreen sites back to company owned locations at the expense of wholesale gallon volumes.
But through all the changes, CrossAmerica did note some gas sales impacts.
“Crude oil prices were more range bound during the fourth quarter of 2024” than they were in 2023, said President and CEO Charles Nifong. As a result, he noted, fuel margins “were not as strong as the prior year.”
Pilot sees a drop in fuel volumes
Pilot Company’s full-year revenue last year dropped by $9.9 billion — a more than 17% decrease from 2023, according to parent company Berkshire Hathaway’s annual report. Berkshire said Pilot’s losses were “primarily attributable to lower average fuel prices and a decline in volumes from non-core fuel activities.”
Pilot has now experienced major revenue declines for two straight years. The travel center chain’s full-year revenue fell about 22% between 2022 and 2023, which Berkshire attributed to lower fuel prices, as well as lower fuel sales volumes and in-store sales.
