Retail might not be in a good place right now, but that doesn’t seem to affect Walmart much. The world’s largest retailer has beaten Wall Street estimates in the second quarter and seems well positioned to do well in the second part of the year, thanks to the back-to-school and holiday season.
According to Jharonne Martis, Refinitiv’s director of consumer research, this success is in part thanks to a “secret ingredient” that gives Walmart the edge over the competition.
In a recent chat with Yahoo Finance Live, Martis identified Walmart’s gasoline discounts as a big reason why the company manages to have favorable results in challenging times. The retailer offers Walmart+ membership, which, among several other perks, gives members a 10¢ a gallon discount on its own stations as well as those of Murphy, Exxon, and Mobil.
“When you look at the same store sales number, not only are these customers opening a membership to save money at the pump, but they’re parking their cars, and they’re going inside of the store and this is translating into strong same store sales, excluding gas,” she explained.
Gasoline discounts especially proved useful in recent months when gas prices skyrocketed in the United States and were more than $5 per gallon at one point.
Walmart shares have seen a slight slip in recent days but are still doing well compared to other retailers. The stock is down 6.82% year to date compared to Target, which saw its shares dip 30% in the same period.
