Grocery chains and bigger retailers have opened their own gas stations. This is a trend more and more retailers are adopting. It shows that retailers are willing to adapt to customer needs while also growing their business.
We can now shop for groceries and fuel at the same time. It means saving time and gas money for the customer. For the retailers, it’s a smart way to increase the customer base and grow the business. This article explains the reasons retailers entering fuel business and how it impacts their customers.
The Big Picture: Why Are Stores Selling Gas?
Retail stores have a lot to plan and execute when it comes to adding a gas station. However, the main reason fueling this trend is that gas stations drive customers before anything else. Everyone needs gas at some point, and when stores offer it, they increase their chances of a customer picking that store.
When you stop to get gas, you are more likely to go inside the store to buy things. This is the core of their strategy. What can be a quick trip for gas can easily turn into a full grocery run. This increases foot traffic and boosts overall sales. The gas pumps are the first part of the store that customers encounter, making them a sales magnet.
For many retailers, adding fuel stations is part of a long-term business growth plan focused on increasing foot traffic and customer lifetime value.
More Than Just Gas: Building Customer Loyalty
Retailers are not only selling you goods. They are selling you time and convenience. With time-saving supermarket and gas station combos becoming increasingly popular, people can gas up and do their grocery shopping in one place instead of making two stops.
Gas reward programs are often the reason for this loyalty. Customers get discounts on gas for grocery purchases. The more customers save on gas, the more they will shop at the supermarket for groceries. There are definitely more than just 2 stops a customer can make on their way to the gas station and supermarket. Fuel rewards make people more inclined to shop where they can get fuel discounts.
Gaining a Competitive Edge
Competition is one of the driving factors in the retail world. Every store is trying to figure out how to best differentiate itself. Adding a gas station is a great way to do that. It allows retailers to distinguish themselves from others that only sell general merchandise.
If there are two grocery stores in proximity to each other and one of them offers a gas discount, then you are more likely to shop at the one with the gas discount. In fact, it is unlikely that any business would not deserve a high level of consideration to partner with a gas station other than a close embodiment marketplace store.
How Does This Trend Affect You?
More retailers entering the fuel business influence how you spend money and how you shop. Knowing the consequences helps you to be a better consumer.
The Good News: Savings and Convenience
Possibly the most important benefit to you is savings. Spending less money is great and can be achieved by using fuel rewards programs. These programs allow you to gain points while shopping that can then be used to lower the price you pay for gas. Depending on how much you shop and drive, this can result in hundreds of dollars in savings each year.
The convenience factor also plays a role. You can fill the gas tank and restock your supplies in one go. It saves you from going to a gas station to fill up beforehand and therefore saves time. This is one of the most beneficial aspects of these programs. They make running errands simpler and give you more time to spend on other things.
The Other Side: Potential Downsides
There are multiple factors to evaluate with regard to these services. Possibly the biggest ‘pro’ is the discounts. However, there is one major downside to these fuel discounts, and that is the customer loyalty. Fuel discounts require the customer to remain loyal to one single travel plaza or retailer. As a result, you may have to sell your soul to one popular retailer, regardless of the potential prices of different groceries. Ultimately, you may end up spending more at the retailer to save a few bucks at the pump.
Let’s also discuss potential fuel quality. Most of the time, fuel quality is not a concern. Most travel plazas and gas stations get their fuel from the same large suppliers. However, your gas may be older or of lower quality if the travel plaza or gas station is not well-maintained or is rarely used. A busy travel plaza or gas station usually signifies good traffic and fresh fuel.
Who Are the Key Players in This Trend?
The successful plunge into the fueling business by major U.S. retailers has established the model for integrating retail consumers and fueling customers.
Supermarkets Leading the Charge
Supermarket chains like Safeway and Kroger are the pioneers of this concept. Kroger has one of the most popular fuel programs. Shoppers earn fuel points while purchasing groceries or gift cards, which they can use at Kroger fuel centers or participating Shell stations. This cooperation with one of the major fuel companies extends its program reach and increases convenience.
Safeway has a similar program for its customers. It is part of the Albertsons family of stores. These supermarkets prove that the right loyalty program constructed around fuel can drive a business.
Big-Box Stores Join the Fray
Big box retailers, including Walmart and Costco, have expanded their business by joining the fuel market. Costco, for example, is known for having some of the cheapest fuel prices in the area. However, customers need to sign up for a Costco membership to take advantage of the low prices. It costs around $60 a year.
Discounted fuel prices entice thousands of customers to sign up for memberships. Additionally, Walmart has partnered with Murphy USA to offer fuel discounts where customers can pay through a Walmart debit/credit card or a Walmart+ membership to access the fuel discount. Retail giants like Walmart and Costco can take advantage of their size and cut fuel prices. It creates competition for traditional fuel vendors.
Conclusion
The increase in retailers starting to sell fuel is changing how we shop and refuel. Grocery chains and big-box retailers are winning by offering both fuel and groceries and combining both with convenience, savings, and loyalty programs. While some concerns exist with loyalty restrictions and fuel quality, the savings and time efficiency provided by fuel purchases are the primary drivers for most customers.
As retailers begin to venture beyond fuel, including the installation of EV charging stations, it is evident how quickly they are adapting to changes in transportation. For customers, this means more options available and more attractive and streamlined shopping. The combination of fuel and retail is more than a strategy; it is the essence of the future and convenience-driven fuel retailing.
This move often reflects a mature phase in the business life cycle stages, where companies look beyond core products to sustain long-term growth.
Frequently Asked Questions
Are retail gas stations a good gas provider?
Most grocery retailers should have gas stations that are neither in terms of price nor in terms of quality.
What do gas discount programs do?
You may receive gas discounts by making purchases at participating stores. For instance, a $100 grocery purchase may entitle you to a discount of $0.10 per gallon when you next fill up.
Is it possible to save significantly in these programs?
Savings begin with participation frequency. Riding along with gasoline consumption and driving distances, a household’s annual savings can reach several hundred dollars with these programs.
Are retailers ready for the future of driving?
Yes. Retailers are installing sets of EV charging stations. They view these as enabling the next level of customer service to be provided.
