This interview was brought to you by support from Capspire.
ALEXANDRIA, Va.—Fuel demand remains volatile as the pandemic continues, making it crucial for convenience retailers to maximize margins and efficiently manage supply in response to market shifts. NACS Magazine recently interviewed Mike Strickland, managing director, capSpire, on the importance of a diversified fuel supply chain.
Q: COVID-19 has created unpredictable fuel demand, making it more important than ever to maximize margins during periods of low demand and quickly scale up supply when demand normalizes. What can retailers do to ensure their business can handle this volatile environment?
A: With fuel demand more unpredictable, it’s critically important for retailers to diversify supply options. The old school model of buying low rack at the closest terminal allows for a simplified supply chain, but this simplified model often forces retailers to sacrifice margin. Retailers should start to consider diversifying supply strategy with self-supply, long-term contracts, day deals and low rack. Diversifying the supply strategy will allow the retailer to take advantage of a variety of options to not only decrease laid cost of fuel but also ensure that there is a committed volume available at all times.
Q: How can retailers make the best decision around diversification?
A: capSpire can help because of our unique position in this space and our understanding of two things: the ins and outs of the c-store industry and the technology that can drive it to higher levels. Our team isn’t just well-versed in the business practices required to support a diversified supply chain. We’re also deep experts in the technology needed to drive that change. The secret sauce is utilizing our unique position to build custom road maps for retailers and implement the project from start to finish with real, tangible results.
Q: What industry patterns have you seen over the past 12 months?
A: Our experience with over 50% of the largest c-stores in the industry gives us a front-row seat on how to help companies navigate the fuel supply chain more efficiently. These leading retailers are developing new processes, making their organizations leaner, relying on technology to make better decisions and—as mentioned earlier—diversifying their supply options. It’s not enough to say “Well, this is how we’ve always done it” anymore; we’ll continue to see an openness to new, proven processes. The smartest c-store leaders are challenging what’s been done over the past 20 years and relying on strong technology to make change happen.
“Optimize Decision-Making” is featured in the November issue of NACS Magazine.