Behind the 2022 Fuel Leaders Rankings

The 2022 Fuel Leaders supplement published by Fuels Market News and NACS is based on data collected by the Oil Price Information Service (OPIS) and drawn from hundreds of retail operations of all sizes throughout the fuel retailing industry. OPIS, a Dow Jones Company, tracks the performance of over 250 fuel retailers and ranks them in an annual report. Through a special partnership with OPIS, NACS is presenting a targeted subset of this data in the third-annual Fuel Leaders supplement to Fuels Market News Magazine.

Analysts use the OPIS rack-to-retail margin methodology to estimate the gross profit on a gallon of gasoline. While some chains may pay more or less than the posted rack, the OPIS methodology provides a reasonable metric for each chain.

OPIS also tracks the market share based on volumes sold on the WEX Universal fleet card. While fleet purchases may vary slightly from how the everyday consumer buys fuel, the analysis shows that they trend closely, and the relative consistency makes it a valid datapoint.

As a further enhancement, OPIS partners with Orbital Insight, a company that tracks location information on more than 116 million cellphones in the U.S. through various mobile apps. OPIS geo-fenced all 130,000 stations (by hand) in the country to track the number of times a device visits a convenience store to provide insight into which sites are seeing the most potential customers. While there may be regional disparities in smartphone usage, the relativity of visits between a site and its direct competitors is unprecedented. These cellphone ping data are used to calculate an alternative market share for each brand.

Getting the best estimate on each chain’s volumes starts with the monthly taxable gallon information reported on a state level by government entities. Analysts then apply two market share methodologies to estimate total gallons by calculating each chain’s market share in the state against the total taxable gallons reported each month, and then dividing that number by the count of stations to offer an approximate monthly volume per site. Matching the estimated volumes to the margins shows total profit on gasoline sales and estimated profit per site. Both methodologies are separate but also averaged together to try to flatten any biases in either technique.

Taking it all a step further, analysts study the data on a localized level, comparing a chain’s sites to the other sites in the communities in which they operate within a one-mile radius. This information makes it possible to determine each brand’s market share against direct competitors. Researchers also calculate a head-to-head “winning percentage” by examining chain performance against competitors in the same community to identify which brand was more efficient. As an example, if “chain A” and “chain B” compete in the same 10 communities, and “chain A” was more efficient (market share divided by outlet share) in eight of those communities, that would indicate that “chain A” had an 80% winning percentage against “chain B.”

OPIS ranks each chain in a variety of categories but weights them differently based on conversations with industry insiders on what they felt were the most important metrics. Estimated monthly profit per site is rated the most important category, followed by total overall estimated profits. Other categories ranked include price differential, overall market share, local market share, margins, property values and more. The final overall ranking takes weighted ranking by category into consideration to determine the chains with the best performance.

Some chains in the report had thousands of sites with a huge multistate footprint, while others were small single-state operators with just a handful of locations.

As OPIS notes, “In summary, this report is our best answer to the question we are so often asked. While we may not be able to tell you with 100% certainty who the most-profitable fuel retailer is, or which convenience store chain or major brand is the strongest, this data-rich report is an excellent relative approximation from which many critical insights can be gleaned.”

The full OPIS report containing highly granular information on each chain is available for purchase from OPIS at www.opisnet.com.