Chain Retailers Who Are They? Chain retailers are companies such as Kroger, Walmart, Sam’s Club, Wawa, Costco and Safeway These are the big box stores. These retailers have become among the newest and most influential players in the U.S. retail fuel landscape. Chain retailers construct the stations on their own sites, so they own the entire station. Their stations also usually fly their own brand flag. How Do They Buy Their Fuel? Chain retailers buy an enormous amount of fuel, usually on a rack basis, but also on a spot basis. Remember – they are HUGE fuel buyers and most often are aggressive negotiators with their suppliers. Their fuel-buying operations are among the most sophisticated in the industry. They leave nothing on the table! On the street, they often feature the most competitive prices in the market, using fuel as a loss leader to get the customer into the store. Looking Ahead The trends that shaped the current retail landscape are here to stay and OPIS market watchers fully anticipate: • More refiners are going to divest themselves of retail sites and focus resources on other areas, such as exploration and refining. • More hypermarketers are going to enter the market and further shake up competition. • Jobbers are going to buy more stations and probably other jobberships, thus creating more superjobbers. Conclusion And – above all – the price influence chain will continue to ripple volatility down from the NYMEX, to the spot market, to racks and to the retail level. As we said at the beginning, buying fuel is confusing – it’s not like stocking pencils or pens or paper cups. And with a market that moves in rapid-pace, it can be daunting to make the right decisions. But, now that you understand how futures, spot and rack markets influence prices at the pump, you can start to anticipate and better prepare for market volatility. To learn more about how OPIS can help you navigate the complex gasoline and diesel markets, visit opisnet.com. Fuel Buying 101, Part 3: Retail Markets | Oil Price Information Service (OPIS) © 2020, all rights reserved 24