Walmart (WMT.US), Costco (COST.US), and Other Retail Giants Accelerate Expansion into Fuel Business as Gas Stations Become the New Battleground

According to recent reports that despite the rising prominence of electric vehicles, major retailers such as Costco (COST.US), Sam’s Club, and Walmart (WMT.US) are actively expanding their fuel operations. Traditionally not major players in the fuel sector, these warehouse-style stores are now extending business hours, increasing vehicle capacity, and building out infrastructure to grow their presence in the fuel market.

Industry experts consider this development expected. Joe Camberato, CEO of National Business Capital, stated, “The world remains highly dependent on gasoline rather than electric vehicles. Although the shift to EVs is anticipated, such large-scale transformations often take decades. EV infrastructure, including charging stations and power supply, is not yet complete.” He added that while the transition is underway, the fuel sector continues to present strong profit potential.

To support this outlook, Walmart plans to open over 45 new gas stations across the U.S. in 2024. According to spokesperson Amanda Cantu, these stations will be located in 34 states, linked to more than 450 stores, and will not overlap with Murphy USA (MUSA) sites. She noted that Walmart offers competitively priced fuel, with Walmart+ members saving up to $0.10 per gallon, along with a variety of grab-and-go items at convenience locations.

Although Costco and Dollar General (DG.US) have not responded to media inquiries, Costco earlier announced extended hours for its member-exclusive fueling centers, now open until 10 p.m., compared to the stores’ usual 6 p.m. closing time. In a March earnings call, CEO Rob Vachris confirmed, “Our fueling stations are now open later, with some starting earlier as well.”

Dollar General’s fuel expansion has been more conservative, starting with pilot stores in Alabama and expanding to over 40 locations, mainly in the southern region of the U.S.

Foot traffic data from Placer.ai indicates intensifying competition among non-essential goods retailers. Elizabeth Lafontaine, Head of Research at Placer.ai, stated, “Retailers are looking for ways to encourage customers to choose them over competitors, and fuel stations are a powerful strategic tool.” She also noted increased overlap between convenience store and retail shoppers since the pandemic, suggesting that chains are working to regain foot traffic.

Dr. Usha Haley, W. Frank Barton Distinguished Chair in International Business at Wichita State University, observed that leading retailers are using similar strategies to attract price-sensitive customers. With profit margins often below 3%, no company is willing to let competitors gain an upper hand. She said, “Walmart’s move into fuel shows its intention to compete with Costco’s success. By 2024, fuel is expected to account for about 12% of Walmart’s total sales. Walmart’s stations are open to all customers, unlike Costco and Sam’s Club, which are members-only, potentially widening Walmart’s reach.”

Haley further noted that while Walmart and Costco have both tried to shift tariff costs to Chinese suppliers, the latter refused due to low margins. Walmart has acknowledged the likelihood of passing these costs to consumers and expects a drop in sales, with fuel revenue helping to offset the impact. She also mentioned that Walmart anticipates an initial drop in fuel prices under potential Trump-era policies, which could mitigate some tariff-related losses, though prices may rise again later.

Manish Choudhary, CEO of SymphonyAI, stated that as natural gas remains widely used, investing in fuel infrastructure is logical—even for non-traditional players. “This trend reflects a broader industry shift toward expanding services beyond traditional grocery and retail,” he said. Fuel stations help boost loyalty and offer convenience to customers shopping nearby.

In an industry affected by supply chain challenges, tariffs, and inflation, fuel services offer relative stability. Choudhary explained that with consumer expectations shifting due to market volatility, retailers are adopting new methods to build loyalty and enhance every customer touchpoint. SymphonyAI’s Grocery Sentiment Index highlights the influence of loyal customers on overall sentiment.

He also pointed out that some retailers may be preparing for a future dominated by electric vehicle charging. “While traditional fueling takes around seven minutes, EV charging can take 30 minutes or more, even with fast chargers. This extended time provides a unique chance to draw customers into stores,” said Choudhary.

Thus, while the expansion of fuel services appears to signal a return to traditional models, retailers are ultimately positioning themselves for a future in which customers shop while their electric vehicles charge outside.