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Walmart (WMT+0.51%) is taking a page out of Costco’s (COST+1.47%) playbook by ramping up its fuel station operations.
The retail giant plans to open or remodel over 450 fuel and convenience stations across 34 U.S. states by the end of 2025. Costco, by comparison, operates more than 700 gas stations, according to its latest annual report. Walmart and Costco did not immediately respond to Quartz’s request for comment.
This move could be one way Walmart aims to compete with Costco’s popular fuel program, which made up about 12% of total sales in 2024. While Costco keeps its gas stations exclusive to members, Walmart’s stations are open to everyone, potentially providing a larger customer base and a profit boost.
In addition, Walmart is offering a new perk for loyalty members: a 10-cent discount per gallon at Walmart stations, as well as at participating Exxon (XOM-0.79%), Mobil, and Murphy (MUSA+0.06%) stations.
Meanwhile, Costco has been expanding its fuel business. Recently, the warehouse only retailer said it would extend hours at its stations to boost usage, as it tries to recover from a slight dip in gas station sales last year.
With Walmart’s aggressive push into the fuel space, the company is banking on convenience to help it compete with Costco.
This expansion comes after Costco reportedly followed Walmart’s lead on U.S. tariffs. Earlier this week, Costco asked its Chinese suppliers to absorb the cost of new tariffs – similar to Walmart’s move. This has sparked pushback from suppliers, who claim the added burden could further squeeze already razor thin margins. Previously, Walmart has said it would pass tariff costs onto consumers, while Costco has stated it would phase out items in lieu of more popular items.
On the other hand, Walmart and Costco diverge when it comes to Diversity, Equity, and Inclusion (DEI) initiatives. Costco is sticking firmly to its DEI plans, while Walmart has said it plans to scale back its efforts.