ND1004111

Title: Leading Retailers Offer Glimpse Into Industry?s Future

Description: Panelists shared their thoughts on the future of fuels, consumer behavior and their thoughts on the industry?s bright future during the ?A Tale of Two Retailers? session at the NACS Show.

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CHICAGO ? Industry leaders shared their stories of past success and predictions of the future during Monday?s General Session.

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During ?A Tale of Two Retailers,? presented by NACS Magazine, Speedway LLC President Tony Kenney and Valero Energy Senior Vice President Gary Arthur provided overviews of each of their companies and spoke with moderator Joe Petrowski, CEO of Cumberland Gulf Group, about the direction of the fueling industry.

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With 249 million petroleum vehicles on America?s streets, and only about 600,000 alternative fuel vehicles, a question on everybody?s mind, Petrowski said, is what will people be fueling their cars in 10 years? With electricity? Compressed natural gas (CNG)?

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?At Valero, we look at what the trends are and we obviously talk to a lot of industry experts,? Arthur said. ?We forecast the future and we track a lot of this activity. For the next 20 years fossil fuels are still going to be the preferred fuel choice. There may be some growth in some of these alternatives, but clearly we see it?s going to remain a gasoline/diesel transportation business.

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?We?ve looked at CNG. I think CNG will have a role, but I think it?s more in fixed fleets because of the infrastructure requirements. If you look at CNG at a c-store location, it takes a considerable amount of land. The investments are significant. There?s a big upfront cost to [offering] CNG.?

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Kenney shared a chart that showed a projected 5 percent decrease in the consumption of gasoline during the next decade, but a 5 percent increase in diesel consumption. It?s the biggest change in fuel options he sees in the next several years.

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?It make sense,? he said. ?Diesel is about 20 percent to 25 percent more fuel efficient than gasoline.?

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The two also spoke about consolidation trends in the industry, saying they have seen a lot of rationalization of assets within the industry, but new store construction is still a reality, too.

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?When we build a new store, it?s three times more productive as our average store,? Arthur said. ?So, I think there?s going to continue to be new store construction. As these stores get built they?re more efficient and I think they?re going to have an impact on selective markets under different circumstances. I think we will see some decline [in new store construction], but I don?t think it?ll be near what we?ve seen during the last 20 or so years.?

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Be on the lookout for more in-depth coverage in the upcoming November NACS Show coverage issue of NACS Magazine.

Content Subject: NACS, NACS Show

Formatted Article Date: October 4, 2011

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