by Terrie Ellerbee/associate editor
FuelQuest helps retailers of all sizes that sell fuel “buy it at the right time, at the right place and make sure it shows up on time,” says David Zahn, VP of marketing for the Houston-based supply chain management company.
That’s the short version, but FuelQuest helps retailers with a tall order: managing what has been proven to be a volatile commodity.
“Prior to 2004, price swings within a day of 3 cents (per gallon) or more happened about 6 percent of the time. If you were buying, you could buy using your spreadsheets with a couple of suppliers and you probably would buy well most days,” Zahn says. “After 2004, it’s risen to almost 50 percent. So just about every other day, the price swings within a day could be 3 cents or higher.”
FuelQuest, whose clients include Lubbock-based United Supermarkets and Dallas-based 7-Eleven, helps retailers keep a tight rein on fuel purchases. Once the company’s software is in place, Zahn says retailers both big and small can realize better margins on fuel.
United Supermarkets is one of many retailers using FuelQuest’s services. United first began offering fuel at its A Taste of Market Street locations and now has five freestanding United Express stores, with two more in the works. In total, United Supermarkets operates 22 United Express fuel and convenience locations throughout Texas, according to its website.
“Just on optimizing the fuel that they keep on hand, we saved them about $2 million—just on that one front alone—and basically helped turn that fuel around for them as a much more profitable part of their business,” Zahn said.
United Supermarkets is on trend with other retailers that have made the switch from branded to unbranded fuel.
“If you have a chain of stores, some people are making the decision that they can brand themselves and not pay that premium for someone else’s brand,” Zahn said. “If you do that, you’ve got to take on some additional responsibilities to manage your own fuel and buy well. That’s when people turn to us. We know how to do that.”
FuelQuest does it for some of the country’s largest fleets, including those of UPS and FedEx. It also manages Pilgrim’s Pride’s bulk fuel.
The services provided by FuelQuest actually help keep gas prices lower than they ordinarily would be as retailers pass savings on to their customers, the company says. The lower the price, the more likely customers are to stop and go inside the store.
“We buy gas every day for our cars, too,” Zahn said. “It’s very important for us to make sure that we buy at the lowest price possible so our customers can be more competitive at the pump.”
With price the No. 1 factor for many consumers looking to buy fuel, the best way to get pump prices down is to optimize the supply.
“There are all kinds of things you have to do to manage around that fuel,” Zahn said. “We can automate all that for the supermarket or convenience stores and allow them to focus on things like profitability inside the store, or even scaling their operations to really go beyond the ones they have today.”
Because the services are web based, retailers of any size—including single-store operations—and in just about every location can utilize what FuelQuest offers, said Scott Cilento, SVP of value assurance.
Hy-Vee is a perfect example of how much the company’s web-based software can do.
“We are still amazed every day that we were able to grow from five fuel stations to 82 with the same two people,” testifies Joe Weber, fuel purchasing specialist, on FuelQuest’s website. “FuelQuest provides us with the automation and management we need to gain greater insight and control into our fuel operations and will help us continue to expand our business and offer competitive fuel prices to our customers now and in the future.”
FuelQuest helps track every gallon of fuel that’s purchased and assists retailers with required reports.
“Our focus is on assisting them in managing their day-to-day fuel business. To be in the fuel business, you have to buy fuel. You have to manage the transportation to get the fuel to your site, and you have to report your sales and your purchases to the government for tax purposes,” Cilento said. “That’s what these companies have to do, so that is our focus, to assist them in doing that. We provide the software to help them report that information correctly to the government for tax purposes.”
Zahn said FuelQuest has figured out how to aid retailers of all sizes, “from the single store operator to the 7-Elevens of the world.
“If you’re doing things the way you did years ago to manage your fuel, then you’re probably at a competitive disadvantage,” Zahn said. “One thing that is very true is that competition has only increased over the years. It’s not decreased.”
