State of the Industry: Propane retailers share their thoughts

December 30, 2014 By    

Retailers in our State of the Industry survey share their biggest business concerns and the decisions they’ve made to improve their chances for success, as well as weigh in on the state of propane supply in their regions.

What’s the most pressing concern for your operation right now?

“Pricing ourselves out of the markets [because of] high wholesale pricing, winter shortages and strong natural gas production. Customers are listening to news about this and making changes. It’s not good for dealers.” – an independent Midwest retailer

“Prepping for winter demand. Availability of product is a major concern if circumstances happen again like last winter.” – a major West Coast retailer

“The lack of new housing on propane. We were in continuous growth mode for years. That has slowed, so marketers are fighting each other for the leftovers, while natural gas and electricity are killing us.” – a farm co-op rep from the Midwest

What have you done in the last 12 months that has increased your chance for success?

“Encouraged summer fills and price-protection plans for our customers; secured volume contracts with reputable suppliers; kept bulk storage filled; educated customers; maintained open communication with suppliers.” – an independent Midwest retailer

“Communicated spikes with our customers. They appreciate knowing when something out of the ordinary happens that could adversely affect them.” – an independent Midwest retailer

What can the industry do to avoid the supply problems it faced last winter?

“More storage of product. Storage tanks should be on the full side prior to the demand season.” – an independent Midwest retailer

“Efforts should be made by marketers to convert will-call customers to automatic and customers who own their tank to be contracted for the season to avoid problems.” – an independent Central Atlantic retailer

“Develop strategically placed supply points. Also, convince producers to sell in the U.S. before moving to foreign markets.” – an independent Midwest retailer

Other retailer observations

“Supplies outside of the two hubs seem to be decreasing, forcing the retailer to travel farther for supply. This adds expenses and creates shortages during peak seasons.” – an independent Gulf Coast retailer

“Residential customer-owned tanks are a huge liability for companies and customers on so many different levels. They’re doing the industry a disservice.” – an independent Central Atlantic retailer

“The industry is not directing toward new residential business. Electricity is gaining a majority of our business. Propane competitors are going after one another instead of working together.” – an independent Midwest retailer

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