Retailers Entering Fuel Business​: Why And What They Gain

Welcome to Bizpremi, let’s walk you through why big stores are now selling fuel. Stating also list of retailers entering fuel business. So is retailers entering fuel business now the real deal?

The world is changing, technology is changing, business also is changing. The world, was not where it was the last five years, neither was it the last 10 years. It’s evolving, and so also the things around. It’s not limited to us either, we are also changing.

There is a new, or should I say common trend now that, Retailers, are moving beyond just dispensing fuel. They are now selling fuel/gas. And trust me, there is a reason for this. Especially in the USA now, stores that normally deals with either; groceries, electronics, clothing are now moving into the fuel business line.

When I say moving, it’s more like diversifying. Not literally meaning leaving the retail business, into the fuel business. And this organizations or stores are putting heavy money, into this new trend business. From companies like; Cotsco, Kroger and the rest. But you might wonder, what’s in this so called fuel business. Why are they moving into it. What’s the benefit. And how does it affect consumers, or the fuel industry. Let’s dive deeper. starting with why they are actually entering this business.

Why Retailers Are Entering The fuel Business

I can tell you, that everything is business. It’s not just a coincidence, that this big stores or companies are entering into this line of business. I can tell you, that it’s driven and motivated by clear agenda which is the business benefits. or clearly stated, Profits. Below are are the reasons or benefits why this is happening massively. Also take time to check Business Start Up Costs.

Extra Profit

This is the first on the list, trust me. Why would anyone want to venture into something that’s not bringing in the rabba (money). Absolutely no one, not even the big stores, or the big companies.

As a store, that directly deals with consumable goods or products, or wearable products, let’s say clothing stores. And imagine them adding the fuel business, by installing a fuel pump, just outside their location. This is an extra income. What do I mean?

If the customers, are not coming to buy clothes, they’ll come to get fuel/gas. Even better they can come and get both, while fueling, they can quickly walk in to do some shopping. This alone, is even enough reason why the big boys are now moving towards the direction of the fuel business.

Customer Loyalty And Rewards

Yeah, tell me who doesn’t want rewards, or discount, for purchasing your daily and primary needs. And trust me the retailers, knows this. They know this another way of getting customers or clients to come back. It’s an act of marketing. So what they do, is tying up fuel purchase with whatever they are selling. Be it groceries or clothing.

A good example of this, is the kroger’s fuel benefits program. Of which they allow customers earn discounts at their fuel stations, just be shopping. Now tell me, isn’t that fascinating. Yes, Yes it is. It is indeed amazing. Wild marketing I’d say.

Customers Convenience

Business isn’t just about profits, as I always say. If the main purpose, or sole purpose of you doing a business is just to make profit. Sorry to say, you’re not in business. Who said? I said it. You can check this article, for what makes a business. 3 Core Values For Building A Successful Business. Despite, a business must profit, it’s a good practice to thing carefully about your customers.

As I have said earlier, the world is changing, so also the people in it. Nowadays, people prefer getting everything they need in one stop. Time is of the essence, majority of us don’t want going around to get what we need. We’d be so happy if we can get all we need at once. This ease stress, and saves time. So if I can fill up gas, while shopping for what I need, is an added advantage. This is a problem, and Retailers are solving it by providing added fuel stations side by side with their stores.

Competitive Advantage

To succeed in a business, that business should have an advantage other other businesses, or other competitors. And adding fuel stations, or fuel centers is one. I mean, if you offer both fuel sales and shopping centers this is a move that most standalone fuel stations, or standalone stores that match. By doing this, you create a value that small competitors often can’t meet up with.

List Of Retailers Entering Fuel Business

Mentioned some retailers already, let’s even state more list of retailers entering fuel business. And don’t be surprised, when big retailers starts to enter. It’s a game changer, entering the fuel business. Below are some of the big US retailers, already in the fuel business.

Walmart

Don’t be surprised. Walmart has been in this fuel business for years now. They don’t directly deal with it, but they partner with some big fuel providers. In doing this, they allow customers get discounted on fuel, with a walmart plus membership.

Kroger

Mentioned earlier. Kroger owns and operates wide fuel centers. They allow shoppers earn points from shopping and then enables them redeem at their fuel stations.

Cotsco

Cotsco, kept for last. They are the most famous and valuable warehouse club that sells fuel only to its members. The price, they always sell is way cheaper than other stations. This ensures, that customers keep returning. Therefore boosting sales.

Target

They are not so into the fuel business, like Walmart, Cotsco and the rest. But I tell you, they are into EV charging stations. Positioning their selves, for the nearest future and what it is set to bring in terms of electric vehicles.

These are the list of retailers entering fuel business, or already in the fuel business, and changing the business world. We’ve seen what they offer, and how they benefit from it. Now as a consumer, or customer what’s your own benefit.

Consumer Benefit

As a customer, a client or a customer this is what you stand to benefit from these retailers entering the fuel business.

• Convenience.
• Lower fuel rates
• Discounts and rewards

As a consumer above, is what you stand to benefit. The ability of you been able to get all your daily needs at a stop is a time management. Getting lower fuel prices, as a reoccurring scheme can save you a lot of amount in the long run. Getting discounts and rewards, is even better. As they profit, you benefit. It’s a win win. And I can say boldly, that’s business.

Impact On Fuel Industry

Before retailers entering the fuel business, there are also standalone fuel stations, that focuses only on fuel sales, which can cause some damage on them.

Which include:

• Competition: As a standalone fuel station, there is high competition. This retailers are selling lower, attracting customers, by also offering shopping ability, providing discounts and rewards. As a standalone, how do you compete against this?
• Going Out Of Business: If you are not ready as a fuel industry, to adapt to this changes or lower prices also to meet up with competition. You might as well go out of business.
• Pressure Buildup: Fuel industries, will be under constant pressure. either to deliver more, lower prices, also go into the retail business, since retailers are entering into theirs.

Challenges For Retailers Entering Fuel Business

There is always Pros and Cons, Merits and Demerits. One can’t exist without the other. So as a retailer, as there are benefits, there are also challenges faced with you wanting to enter the fuel business. This challenges are:

• High Setup Costs: Unlike retail stores, wanting to add fuel stations or centers, always cost more. Cost of building, cost of maintaining. And this usually need big investments or loans. You can check here for Small Business Loan Qualification and Benefits.
• Compliance/Regulations: Building and setting up a fuel station can bring in issues, as regarding compliance and regulations in terms of community safety and mode of operation.

Possible Future Outcome For Retailers

For retailers entering the fuel business, they will also need to position for the coming future. I mean, the fuel business will become less compared to EV Charging networks business. Most modern cars now are EV’s (Electric vehicles). The ability to accommodate this system should also be put in place.

Walmart itself, as part pf the list of retailers entering fuel business, has gone into EV charging stations too, and not just fuel stations. Also with target even though they are not so in with fuel business, they are not taking chances with EV stations.

So in other words, in the nearest future, retailers in the fuel business, would mean more than fuel business as they would need to adapt and also offer EV charging stations.

Final Piece

For retailers that are entering into the fuel business, it goes beyond just making profits. Although, profits are inclined. But it’s also a marketing and strategic move to pull in more customers. Giving them cheaper fuel prices, convenience of getting what they need at a stop, and of course creating tough competition for the standalone fuel industry.

With these, it’ll shape the entire business world. Competition, often equals to doing better. With love from Adegbola Valentine.