BENTONVILLE, Ark. — Wal-Mart Stores Inc. plans to build as many gas stations as it can in an effort to boost profits, as well as encourage its customers to enter its brick-and-mortar stores and purchase higher-margin items.
As CSNews Onlinepreviously reported, Walmart has decided to develop its own proprietary gasoline program for its supercenters that are not currently supplied by its convenience store partner, Murphy USA Inc. Murphy USA will continue to operate the approximately 1,000 already-built Murphy gas stations housed in Walmart parking lots.
“Like other retailers adding gas stations to parking lots, Walmart primarily sees selling gasoline as a way to lure more shoppers to stores so they buy other, higher-margin items in the main store,” reported The Wall Street Journal.
Walmart has run gas stations in front of its warehouse club chain Sam’s Club since 1997 and already operates several hundred in front of its approximately 4,500 Walmart stores, company spokesman Randy Hargrove told the news outlet. But the largest seller of gasoline in front of U.S. Walmart stores is Murphy.
When building new stores, Walmart plans to add its own gas stations to as many as possible, according to Hargrove.
Murphy USA has had an operating agreement with Walmart for the past 20 years. The partnership between El Dorado, Ark.-based Murphy USA and Bentonville-based Walmart has cooled and reignited during the years as Walmart executives shifted their opinions about the topic, the report explained. However, Walmart has had a change of heart since CEO Doug McMillion joined the company in 2014, WSJ reported.
“Walmart long embraced the philosophy of learning a business from an outside company and then finding a way to do it more effectively in-house,” reported the news source. “Since Mr. McMillon became CEO in 2014, Walmart has become increasingly adverse to outsourcing.”
Murphy USA had presented a plan to Walmart last January to build more gas stations in Walmart parking lots. With that plan turned down, Murphy USA announced it will focus on an independent growth strategy moving forward, something President and CEO Andrew Clyde referred to as “Plan B” in a recent call with Wall Street analysts.
"Since our spin [from Murphy Oil Corp.], we have strategically positioned Murphy USA to be a strong, independent company that can achieve a high level of organic growth and shareholder returns with or without another large acquisition of store locations from Walmart," said Clyde. "Through our existing store pipeline; growing third-party land bank; our business improvement initiatives that enhance our core fuels business and differentiated retail capabilities; and the strength of our balance sheet, Murphy USA will continue to grow our base of value-seeking customers independently in both new and existing target markets with great clarity and confidence.”
More than 1,000 of Murphy’s roughly 1,300 gas stations are attached or near one of Walmart's stores.