Companies in this industry primarily sell fuel for motor vehicles; they may also offer car washes, car repairs, or inspections. No major companies dominate the industry. Although major oil companies own few retail fueling outlets, many gas stations contract to sell specific brands of fuel.
The US gas station industry includes about 15,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $130 billion. Revenue for the industry, driven mainly by fuel consumption, can vary significantly from year to year, depending on the price of crude oil.
The industry includes some truck stops but excludes establishments that are combination gas station/convenience stores, which are covered in a separate industry profile.
Demand depends on the volume of consumer and commercial driving. The profitability of individual companies depends on the ability to secure high-traffic locations, generate high-volume sales, and buy gas at the lowest possible cost. Large companies have advantages in purchasing and finance. Small companies can compete effectively by having superior locations. The US industry is concentrated: the top 50 companies generate about 55% of revenue.
As more retailers have added gas to their merchandising mix and big oil companies exit the fuel retailing, the competitive landscape for gas stations has expanded to include convenience stores, mass merchandisers, warehouse clubs, and grocery stores. Convenience stores sell about 80% of all fuel purchased in the US, according to NACS.
Potential long-term threats to gasoline stations include...