Dive Brief:
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Walmart+ members as of Wednesday are enjoying discounts of up to 10 cents per gallon off fuel they buy at participating gas stations, according to an emailed press release from Walmart.
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For Walmart+ members, 12,000 Exxon and Mobil stations are knocking off 10 cents per gallon on fuel, while Walmart and Murphy USA stations are cutting the membership price by five to 10 cents, per the release. Walmart+ fuel pricing is also available at more than 500 Sam's Clubs.
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The discounts come as consumers are being particularly hard hit by fuel price inflation, and a few weeks after Costco reportedly slashed already competitive fuel prices for its members.
Dive Insight:
Fuel prices are volatile at the moment, with their trajectory mostly going up or staying high, pumping up margins for gas stations and sending people in search of the cheapest option.
"Consumers typically shift to big box fuel centers when prices rise given that these companies generally price below c-store rivals," Wells Fargo analysts led by Edward Kelly said in emailed comments Wednesday. "[Costco] and BJ should see the biggest gains, as the club model aggressively prices fuel and the management teams historically talk about a share shift when prices rise."
The fuel discount offered by Walmart+ was a strong enticement from the start, with UBS analysts saying that it alone would be worth the price of membership for many. Walmart has now made that even easier to come by, saying Wednesday that its addition of the Exxon and Mobil locations to the Walmart+ roster means that a Walmart+ fuel discount is available at more than 14,000 stations – a more than sixfold increase.
“Ninety-one percent of our customers are aware of the increased prices at the pump and nearly half of those told us they are changing behaviors because of them,” Chris Cracchiolo, Walmart+ senior vice president and general manager, said in a statement. “More access to a bigger discount will make a difference for our customers. We want Walmart+ to help our customers save time and money, not only when shopping with us, but throughout their day. We're excited to continue to find new ways to deliver for them.”
The Walmart+ fuel footprint now overshadows Costco, which runs just 573 locations in the U.S., though not all include a fuel station. But Costco's prices are consistently recognized as the lowest in the industry, according to fuel price tracking app GasBuddy.
Costco CFO Richard Galanti last month told analysts that fuel accounts for a little over 10% of the retailer's sales. Gas price inflation boosted its total reported comps by about 4%, and average worldwide selling price per gallon was up 37% year over year.
