Case Study
Driving Fuel Profit Growth Through Pricing Transformation
About the Client
A Midwestern convenience chain with over 2,100 stores across 16 states
Situation
A Growing Retailer Needed a Smarter Approach to Fuel Pricing
The C-store chain was in aggressive growth mode. Its strategy included disciplined store additions, strategic acquisitions, and increasing same store sales and fuel gallons. As part of its Value Creation Plan, the company had identified price optimization as one of its key initiatives to enhance store performance and unlock shareholder value.
A main area of focus was price optimization initiatives for fuel. Its leadership sought guidance from
W. Capra to develop a pricing strategy, source effective technology solutions, and create the organizational structure to meet their current and long-term goals.
Before unlocking pricing value, the chain needed the right strategy, tools, and structure
Key Challenges
- Needed a more effective fuel pricing strategy to improve performance and profitability.
- The company needed a technology solution capable of supporting data-driven fuel pricing decisions at scale.
- The company lacked the structure and operating model to manage and sustain pricing decisions across the business effectively.
Solution
Created change management plan and helped client move from decentralized to centralized fuel pricing strategy
Over the course of a couple months, W. Capra conducted assessments, performed analyses, and helped implement a new fuel pricing operating model:
1. Current State Assessment & Data Gathering
Conducted internal and external assessments to evaluate existing fuel pricing processes, benchmark industry best practices, identify emerging trends, and uncover opportunities for improvement.
2. Pricing Strategy & Solution Evaluation
Performed analyses to identify operational efficiency and margin improvement opportunities while researching and evaluating fuel price optimization solutions aligned to the client’s goals and long-term needs.
3. Centralized Pricing Organization Implementation
Designed and deployed a centralized pricing organization, expanded team capabilities, developed a change management plan, and helped ensure pricing decisions could be managed centrally while remaining responsive to local market conditions.
Impact
In the 6-month period following implementation of the new strategy, client gained significant agility to capture additional fuel margin while maintaining a competitive pricing structure, resulting in:
GALLONS
+3.1%
CPG
+2.9¢
PROFITS
+20.5%
The convenience store chain has now fully implemented this new pricing strategy and continues to build data into the price optimization tool.
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