For two decades, Walmart has been letting other gas station occupy their parking lot gas stations through contracting terms. Now, it seems Walmart has a different agenda, they’re going to start operating their own gas stations (like Costco).
According to Nasdaq, Walmart executives recently met with Murphy USA Inc. and have informed the company that they plan to build and operate their own gas stations. Murphy will still have over 1,000 existing contracted locations throughout the U.S. Going forward, Walmart plans to build their own branded gas stations and convenience stores in as many new Walmart locations as possible. If you’ve keep up to date with us recently, we also wrote about the hundreds of Walmart stores closing across the country. Additionally, Walmart also has over 100 new stores in the works and it's safe to assume that these new locations will be primed for the new Walmart gas stations.
Is this another revenue stream for Walmart? Most likely yes. Due to the decline of store revenue plus the minimum wage hike, Walmart predicted a slow in company profits for the year. By establishing their own gas stations, Walmart is no doubt hoping to turn this into another source of profit. Think about it. Besides making a pit stop to fill up your tank, a lot of us usually pick up a little extra something at the gas station convenience stores too. Cigarettes, snacks, drinks and etc. It’s no news that convenience store items are sold at a higher markup and consumers are willing to bare the slight (or not so slight) price hike out of, well, convenience. Walmart’s move will target these exact customers and they’re likely to get a get some margins for themselves and makeup for lost revenue with this new endeavor.