Each year Kalibrate, through its Canadian subsidiary, The Kent Group, produces the country’s most comprehensive data set on the retail fuelling sector. We are pleased to partner with The Kent Group and Kalibrate to offer this snapshot of the country’s fuel landscape.
The 2020 Kent Report shows that significant trends continue to impact the fuels business as it evolves to meet changing demands. And, while some aspects, such as independent fuel dealer vs refiner marketer comparisons and the number of fuel brands are relatively unchanged from last year, other factors that span from COVID-19 challenges reveal big differences between years.
This year’s study identified 11,908 retail gasoline stations in Canada or 3.1 outlets for every 10,000 population. This number indicates a slight decline over 2020 where numbers showed 11,937 fuel sites in Canada. “The number of retail sites in Canada has fluctuated little during the last decade, hovering near the 12,000 mark since 2008 after having contracted near 40% during the prior two decades,” says Jason Parent, Head of Product, Kalibrate Data Insight & MD Kent Group. “We estimate that the Canadian retail gas station population peaked at about 20,360 in 1989, declining steadily until about 1999, and then at a moderately slower pace through to 2014. Since 2014, the number of sites has grown modestly, rising to just over 150 locations, an annual growth rate of only 0.2%.
“In the late 1980s, the Canadian service station industry was significantly over-represented. Consequently, fuel marketers started to rationalize their networks to their larger volume sites. Kent data shows the proportion of sites pumping less than 2.5 million litres annually has shrunk from more than two-thirds of sites in Canada in the early 1990s to less than a quarter of sites in 2019. Far fewer inefficient sites in operation in the Canadian market led to fewer site closures.”
According to Parent, there was a large decline in fuel demand last year due to the COVID-19 pandemic and reduced travel and transportation. This decline has led to an increase in the proportion of locations pumping less than 2.5 million litres annually, rising to nearly 32%of operations in 2020. “Since the demand for fuel is expected to increase in 2021 and further recover in 2022, it is unclear what effect this will have on site closures,” he says.
Given the decline in fuel demand last year, it would follow that there would also be a decline in site throughput. This decline is exactly what the Kent Report discovered. “The 2020 average retail outlet throughput in Canada was 3.31 million litres per year, a decrease of 15.8% from 2019, he says. “Since 1990, throughput efficiencies have experienced an upward trend, a consequence of a long-term rise in petroleum demand coupled with a long-term decline in the number of retail outlets. This trend has slowed in recent years and is likely a consequence of slowing growth in fuel demand combined with a plateau in the number of retail sites in Canada during the last decade.”