Profit mar­gin boost means more gas sta­tions

The Hamilton Spectator - - BUSINESS - DAN HEAL­ING

CAL­GARY — The num­ber of gaso­line sta­tions in Canada grew in 2016 for the sec­ond con­sec­u­tive year, af­ter a 10-year de­cline that re­sulted in the loss of one in five out­lets.

The Kent Group’s an­nual census showed a net in­crease of 15 out­lets in 2016, tak­ing the to­tal to al­most 12,000 or about three sta­tions for ev­ery 10,000 peo­ple. Just over 100 sta­tions were added in 2015.

Although 39 per cent of the sta­tions in Canada sell fuel with brands as­so­ci­ated with the three ma­jor re­fin­ing com­pa­nies — Sun­cor (Petro-Canada), Im­pe­rial (Esso) or Shell — only 11 per cent were owned or man­aged by them in 2016.

Ja­son Par­ent, vice-pres­i­dent of con­sult­ing for Kent, says the av­er­age mar­gin on gaso­line has risen to eight or nine cents per litre in the past two years from the 20-year norm of four to six cents, leav­ing more profits at the pump for the own­ers. He says fewer lo­ca­tions are clos­ing these days be­cause higher mar­gins are sup­port­ing mar­ginal or low-vol­ume per­form­ers.

He said fewer gaso­line sta­tions opened at big box stores like Costco or Wal­mart last year.

“The growth in the num­ber of sites has slowed sig­nif­i­cantly for big box,” he said.

“That said, big box sites are very unique in that they do a ton of vol­ume and they have a big im­pact on the mar­ket, even if there are only a cou­ple of them.”

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