Petrogram -Spring 2012 - (Page 9)
Out & About THE INDUSTRY
Recommendations for 2012
smaller marketers by larger unbranded super-pumpers. The resultant low, inconsistent fuel margin consequence may be exacerbated by price run-ups due to worldwide fears spurred by Iranian or other mid-eastern supply disruptions. We recommend that marketers take a hard look at their respective retail chains and consider divesting from underperforming or antiquated facilities that can’t stand the test of time, or withdrawing from a direct operation in some sites to a dealer lease/ supply model. Long-term business success will be won by marketers that strive to continually improve overall chain quality and performance. On the commercial or third-party dealer supply side of the business, marketers must continue to tighten credit, receivables and security, while formalizing customer relationships to improve the ratability of supply gallons and resultant value of this distribution business. Over the years we have painstakingly deﬁned over 4,500 fuel distribution companies throughout the country. Given this high number of mostly smalland medium-sized operations and the continued competitive and unpredictable environment, we expect an increased number of acquisition opportunities will arise as many of these folks decide to head to the exits. The old adage that “you’re either growing or going” will never been more appropriate than in 2012. As such, growth-minded marketers must be prepared to move decisively when an appropriate acquisition opportunity arises. In 2012 we also predict that we will see several high-proﬁle business failures as a result of the recently concluded oil company retail divestitures. Many marketers stretched too far to make large store block acquisitions, saddled themselves with high leveraged loans at onerous rates or long term, inﬂexible and expensive leases. This is forcing many to charge high unsustainable dealer rents or exacerbate poor store performance by uncompetitive fuel pricing. Any prolonged period of turmoil will prove deadly to companies on the business viability fence, and there are more than a few in this situation. Also expect to see an ever-increasing amount of shuttered bank-foreclosed stores hit the market. Unfortunately, many of these sites will not be of a high
Mark Radosevich, PetroActive Real Estate Services, LLC
hat happened to 2011 – one minute we’re ringing in the new year and a blink later, we’re sitting around the television watching a crappy mid-week bowl game featuring two mediocre Conference USA and Sun Belt teams slugging it out for college football dominance. Imagine the joy on a college player’s face when he’s told that his team was selected to play in the Porta-John classic in balmy Scranton, Pennsylvania. Nothing beats bowl festivities that include a gala steak dinner at Denny’s or a visit to the Mid Town Mall to cheer up the blue hairs getting in their winter workouts. At least we can look forward to the National Championship game scheduled to be played in the new year around Easter. On the petroleum front, the election of 2012 has the potential of setting in motion many positive things for petroleum marketers, should conservative rationality return to Washington. This includes a reduction of intrusive and inhibitive government regulation, increased domestic energy production, greater ﬁscal responsibility and a needed tax overhaul; or maybe not. In all seriousness, I hope the tea party silent majority will turn out in masses to create a tsunami-sized wave that will wash the socialist-progressive wing nuts to the backwash of history, where they belong. On the petroleum distribution front, we envision continued pressure for
Table of Contents for the Digital Edition of Petrogram -Spring 2012
Out and About the Industry
Won’t Pay, Won’t Go... What’s Next?
Advertisers’ Centerspread Marketplace
NACA Partnership with FPMA
Th e Power Within You
Meet the 2012 Sunshine Food and Fuel Expo Keynote Speaker
Index of Advertisers/Advertiser.com
Petrogram -Spring 2012
If you would like to try to load the digital publication without using Flash Player detection, please click here.