Traditional gasoline and c-store brands continue to sell the most gasoline, but consumers are increasing their tendency to fuel-up at grocers or warehouse retailers.
A survey of 4,500 consumers, completed by Market Force Information, reports that Costco and Kroger are consumers’ favorite places to fill their gas tanks as of April 2012.
The survey found that Shell, Costco and Kroger are top-picks for fuel among Americans. Consumers reported they stop at gas stations and c-stores based on location and availability.
Both warehouse retailers and grocers are growing in sales and profits for the gasoline category, creating more competition for c-store and gas station operators. Although 56% surveyed said they visit national gas station brands to fill up, one-third (32%) stop at mass retailers and grocery stores, instead.
The survey also found that convenience and price are top drivers for how consumers choose where to get their petroleum. Cleanliness was also high on consumer concern, followed by ease of entry to the property, brand reputation, fuel quality and customer service. Foodservice, coffee quality and merchandise prices ranked lower on the list.
Costco scored highest for overall cleanliness and fuel price competitiveness, while Kroger scored highest for convenient locations and promotions. Shell ranked first for quality and environmental friendliness of its fuel, and 7-Eleven earned top marks for its available amenities and merchandise selection.
Is Loyalty Lost?
Consumers were asked to name the places where they fueled up in the past three motnhs for the survey. The responses were extremely wide-rangin, from national retailers such as Shell, BP and 7-Eleven to smaller brands such as RaceTrac and Marathon Oil. The extreme differentiation points to a lack of loyalty in the gas station industry.
Respondents were further asked if they would drive past a competitor’s location to fuel at their favorite station. Forty-five percent indicated this statement is “very true” of their favorite retailer. But when asked if they would always choose their favorite brand over other competitive brands even if the price is higher, only 17% said that was a “very true” statement.
“The battle for customer loyalty int he petro-convenience industry is fierce, and quickly becoming more complex as companies like Costco and Kroger take away more business from the mainstay brands,” said Janet Eden-Harris, chief marketing officer for Market Force. “We’re seeing retailers roll out more aggressive loyalty programs to retain their profitable customers and attract new ones.”
Approximately 36% of customers have a loyalty card for a petro-convenience retailer to earn rewards on purchases. Grocers dominate the loyalty card category, with Kroger, Safeway and Sam’s Club the most popular choices.
Fifteen percent of consumers have a branded credit card associated with a petro-convenience brand. Among those who carry these branded credit cards, Army & Air Force Exchange Service led the way with 38%, followed by Sam’s Club (27%), Murphy Oil (22%), Chevron (21%), Walmart (19%) and Shell (16%).