Is the cents-per-gallon metric costing the c-store channel millions of dollars in fuel profits?
Picture that 20-ounce bottled soda in your store cooler. So enticing on a hot day. The sweat of condensation dripping as you pull it off the shelf.
Now consider how you determine its value to your business. You price out the percentage of profit made on the sale of that individual soda by subcategory, brand or fluid-ounce basis. It’s business 101.
Now rethink the equation. What if you priced your profit based not on percentage margin but an arbitrary amount—say, 10 cents a bottle—and focus on making that same 10 cents all the time, every year, no matter the hard cost for that bottled soda?
Absurd? Well, think about your No. 1 destination—gasoline—and the cents-per-gallon metric that’s the current industry norm.