August 2007

Trends and Resources

HP Impact: HPImpact: Boutique product mix strains retailers' profitability

While the upstream oil industry is amassing revenues, the retail business is fiercely competing for profits. Although many consumers think that their local gas stations are pulling in big profits, thi..

Weirauch, Wendy, Hydrocarbon Processing Staff

While the upstream oil industry is amassing revenues, the retail business is fiercely competing for profits. Although many consumers think that their local gas stations are pulling in big profits, this is not typically the case. A recent report from A. T. Kearney takes a look at how oil retailers can thrive in a challenging market. The margin on conventional fuels is often limited, and "the market is being further cannibalized as new products and systems, such as biofuels and hybrids, gain acceptance," notes the report. The more oil retailers expand their services at the station, the more the nonfuel business must become the main source of revenues. Fig. 4 shows a typical profitability s

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