2008 Gas Price Kit

Who Sells Gasoline in the United States?
Convenience stores sell the overwhelming majority of the gasoline purchased in the United States, and despite canopies that promote a specific brand of gasoline, very few of these stores – less than 3 percent – are owned and operated by one of the integrated, major oil companies. 

It is much more likely that the business is owned by an independent entrepreneur who lives in the community. Of the roughly 115,000 convenience stores selling gasoline in the United States in 2006, about 60 percent were one-store operations, compared to only about 13 percent that were operated by a company having 500 or more stores.

Convenience stores sell more than four-fifths of the country's motor fuel
Convenience stores in 2006 sold an estimated 82 percent of all gasoline and diesel fuel purchased in the U.S. – a sharp increase from as recent as 1997 when convenience stores sold an estimated 59 percent of the country's motor fuel.

Overall, 79 percent of convenience stores sell motor fuels, and gasoline and diesel fuel sales account for 71 percent of the convenience store industry's total sales. (However, low gross margins on fuel – 5.8 percent in 2006, the lowest level since 1983 – mean that motor fuels sales contributed only about one-third of total store gross margin dollars – 34 percent.)

Contrast this to 1971, when only 6.8 percent of convenience stores – a total of only 1,401 stores nationwide – sold gasoline. What happened?

Following the 1973 OPEC oil embargo, more states began allowing self-service fueling (New Jersey and Oregon still prohibit it), so the number of convenience store gasoline outlets grew. By 1976, stores selling gasoline were profitable and the numbers were growing. There was a competitive battle in gasoline retailing as seen by the number of stores offering gasoline – the average margin dropped, while the average gallons sold per store went up. As the major oil companies withdrew from certain locations, convenience stores became more and more significant as a source of gasoline sales.

'Hypermarkets' increasingly are selling gasoline
Besides convenience stores, a growing percentage of gasoline sales in the U.S. are from "hypermarkets" or "hypermarts" – the terms collectively refer to the group of mass retailers that includes supermarkets, discount retailers and warehouse clubs. According to Energy Analysts International (EAI) and its "Outlook for the U.S. Fuels Business & Hypermart in Retail Business Study," as of July 2007, there were 79 hypermarket companies in the United States operating at least one retail gasoline site. These companies represented over 4,300 "hypermart" sites (big-box retailers) and sold 14.2 billion gallons of gasoline. These sites sell approximately 275,000 gallons per month, about 2-1/2 times the volume of a traditional fuel retailer. It is predicted that by 2012 five companies will be responsible for 77 percent of all hypermarket motor fuels sales: Wal-Mart/Sam's Club, Costco, Kroger, Safeway and BJ's.

One particular area of growth for fuels sales is supermarkets. In 2003, only 18 percent of new supermarkets had gas pumps. But almost 62 percent of grocery stores that were scheduled to be constructed in 2004 included fueling in their blueprints, according to the Food Marketing Institute.