Wal-Mart Stores Inc. will give customers who use its cards as much as a 15 cents-a-gallon discount on fuel for four months, a move an analyst said is designed to re-establish the retail giant’s position as a price leader.
The discount is available at all Texas Wal-Mart stores with a fuel station, a spokeswoman said by email. Sam’s Clubs are not participating.
Saying gasoline prices have jumped in recent days, Wal-Mart said Wednesday that its customers who use a Wal-Mart MoneyCard or a Wal-Mart credit card will get a 15 cents-a-gallon discount on their fuel purchases starting Friday.
Customers using a Wal-Mart gift card will get a 10 cents-a-gallon discount starting Friday.
Wal-Mart’s program will run through Dec. 24.
Wal-Mart said the fuel discount will be offered in Texas and 19 other states. The discount applies to all grades of gasoline and diesel, a company spokeswoman said in an emailed comment.
“Our customers are sending their kids back to school and planning for Labor Day travels, and the holidays are just around the corner. As gas prices get higher, these tasks get tougher,” Duncan Mac Naughton, Wal-Mart’s chief merchandising and marketing officer, said in a statement.
“We’re here to help. Last year, we saved our customers nearly $60 million with the gas rollback program. This year, we’re excited to provide an even bigger discount on fuel that will help them save more money when they need it the most.”
Last year, Wal-Mart rolled out a 10 cents-a-gallon discount program in late June. San Antonio-based grocer H-E-B introduced a similar program a month later.
On Wednesday, H-E-B spokeswoman Dya Campos said in an emailed statement, “Last year H-E-B ran our 11-cent-off gas promotion. We have been working on another gas promotion for some time and have plans to announce our promotion on another date.”
H-E-B’s discount began in late July last year and was available at H-E-B’s participating fuel stations in San Antonio through the end of December, Campos said.
Gasoline prices have jumped this week on concern about fuel interruptions caused by Hurricane Isaac. Before the storm slammed into the Gulf Coast on Tuesday, many energy companies had closed refineries and evacuated offshore oil platforms.
On Wednesday, the price of gasoline jumped almost 7 cents overnight in San Antonio to an average $3.64 a gallon, according to AAA.
Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment banking firm in New York, said Wal-Mart’s fuel discount is a smart move.
“Wal-Mart built their business on being the price leader in retail. That is less and less true, because today we have Family Dollar, Dollar Tree, Dollar General. And the latest study showed that Target had lower prices than Wal-Mart.
“So what this really is about is picking a very high-profile area — gas — and trying to re-establish their price leadership position,” Davidowitz said.
Target this month had lower prices than Wal-Mart for the first time since October, according to research conducted by Bloomberg Industries, which provides industry research and data for business and financial professionals.
Minneapolis-based Target also led by the widest margin in price since the monthly study began two years ago, Bloomberg News reported. The study looked at the gap in average price across a basket of 150 like items at stores within five miles of each other.
Wal-Mart’s local rival, H-E-B, doesn’t necessarily need to respond with a gas-price discount, Davidowitz said.
“They are in a battle every day, and food is about footsteps,” Davidowitz said. “So H-E-B may feel they have to do something, and I think they will respond in some way. They don’t want to lose foot traffic.”
Stores in Houston weren’t included in the 2011 fuel discount, Campos said. vvaughan