There are 161,768 retail gasoline outlets in the United States, based on the 2008 station count by industry publication National Petroleum News. This count includes all fueling outlets in the country, including many very low volume retailers, such as marinas. Of this total, more than 114,000 are convenience stores. These 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 2 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 2008, about 56 percent were one-store operations, compared to only about 14 percent that were operated by a company having 500 or more stores.
(Source: NACS/TDLinx Official Industry Store Count, Feb. 2009)
Convenience stores in 2007 sold an estimated 80 percent of all gasoline and diesel fuel purchased in the United States – a sharp increase from a decade ago (1997) when convenience stores sold an estimated 59 percent of the country’s motor fuels. The other 20 percent is sold through an increasing number of hypermarkets (mass retailers, supermarkets, discount stores, warehouse stores) and a declining number of fuel-only stations.
Overall, 79 percent of convenience stores sell motor fuels, and gasoline and diesel fuel sales account for 70.8 percent of the convenience store industry’s total sales. (However, low gross margins on fuel means that motor fuels sales contributed less than one-third of total store gross margins dollars – 34.5 percent.)
In recent years, several major integrated oil companies have announced their decision to exit the retail marketplace and sell all of their remaining corporate retail locations. As of August 2008, the five largest integrated oil companies owned and operated 2,140 retail locations:
- BP: 796
- ChevronTexaco: 388
- ConocoPhillips: 103
- ExxonMobil: 799
- Shell: 54
(Source: Convenience Store News, August 18, 2008)
Of these companies, BP, ConocoPhillips and ExxonMobil have all announced their intention to leave the retail marketplace in the near future. Once these sales are complete, major oil will own and operate less than 1 percent of the U.S. convenience stores that sell motor fuels.
Despite their exit from the retail marketplace, the major integrated oil companies will retain a presence at retail through their branded outlets. These are independent businesses that sign a supply and marketing contract with their refiner-supplier to sell fuel under the brand of that supplier. These locations are designed to reflect the image of the fuel supplier and are often mistaken by consumers as being directly owned and operated by the refiner-supplier.
However, the reality is that there is no link beyond an agreement to sell a specific gasoline. The arrangement is similar to arrangements inside the store, where a store may choose to dispense a specific brand of soft drink and receive branded dispensers and other signage. But the business arrangement ends there.
The other retail format prevalent in the market is the independent, unbranded retailer. These businesses have not signed a supply and marketing agreement with a refiner-supplier and often establish their own, private brand for their store and their fuel offer.
Of the 161,768 retail gasoline outlets in the United States, about 35 percent sell fuel under the brand of one of the five major integrated oil companies (Shell, BP, ExxonMobil, ChevronTexaco and ConocoPhillips), including the 1 to 2 percent that are owned and operated by these companies. Another 20 percent of all retail fueling outlets sell fuel under the brand of a refining company (such as Valero, Sunoco or Alon), while 45 percent sell fuel under their own, private brand.
In addition to convenience stores and gas stations, there are a number of big-box retailers that sell fuel, including Walmart, Costco and a number of grocery chains. As of September 2008, there were 77 hypermarket companies in the United States operating at least one retail gasoline site. These companies represented more than 4,495 “hypermart” sites (big-box retailers) and sold 13.9 billion gallons of gasoline. These sites sell approximately 258,000 gallons per month, about twice the volume of a traditional fuel retailer. Overall, the fuel site growth for hypermarts has slowed down to an annualized rate of 224 sites for 2008. The supermarket subset has grown the most over the past year at a 5.5 percent rate.