The COVID crisis has had a dramatic impact on all aspects of our lives. More data is becoming available from 2020, this will provide further insight into the realities of the past year as well as aiding in assessing future operations. OPIS (Oil Price Information Service) recently released volume and gross margin data. Below is our interpretation of that data along with a table for visualization.
Volumes: Volumes for the six New England states were down 23.9% from 2019. All states experienced a decline, some worse than others, as consumers traveled less. The more populated states of Massachusetts, Connecticut, New Hampshire, and Rhode Island had an average decline of 25%. While the more rural states of Maine and Vermont experienced smaller decreases of 16%.
Gross Margins: Large gross margins offset volume losses in March – May. Throughout the region annual gross margins increased by 9.8¢ per gallon over 2019. Maine and New Hampshire had the largest gain of 15¢ per gallon, Vermont had the smallest at just 6.8¢ per gallon. Volumes and gross margin go hand in-hand. Comparing the average gross profit per outlet for 2020 versus 2019 provides the true picture for the store operator. The combined effect of lower volumes but higher gross profits are shown in the gross profit per outlet.
Maine, New Hampshire, and Rhode Island all had increased, with Maine outlets being up an astounding 44%. Connecticut and Massachusetts outlets experienced a decline, as increased margins couldn’t offset lost volumes.
As vaccines are administered throughout the region, continued improvement in consumer travel is expected. Volumes and in-store sales are expected to rebound. Overall, 2020 was a bumpy road for the industry. C-store operators continue to prove that they are a resilient group and can quickly adapt to changes brought on by economic downdrafts, increased regulations, and even a pandemic. Good work everyone!
Check out our Archives:
https://cstoreinvestments.com/blog/
