Costco may be losing at the pump but they are profiting in other areas

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Costco and Other Wholesale Clubs Are Selling Gas So Cheap They’re Losing Money in Some States


With gasoline prices near record highs, wholesale clubs are luring customers by offering extra discounts at the pump—cuts so steep that the chains are effectively losing money for each gallon of gas sold in some states, new numbers show.

Walmart (ticker: WMT) announced last week that members of its Walmart+ subscription, launched just 18 months ago, will save up to 10 cents per gallon at more than 14,000 gas stations across the country. That’s twice the discount the retail giant previously offered, with the number of eligible gas stations expanding sixfold through a partnership with Exxon Mobil (XOM).

Walmart isnt the only big box retailer dangling cheaper fuel to win customers. All April, BJ’s Wholesale Club (BJ) offered a 50-cent-a-gallon discount to members that spend more than $100 in stores on the same day. The company also allowed members to increase their gas discount by purchasing eligible products or using store-issued credit cards.

Costco (COST), another major chain known for cheaper gas, also has made its prices more competitive. Over the past decade, the firm typically charged 20 cents a gallon less than immediate competitors in the same ZIP Code. That gap hit 35 cents as of mid-April, according to data from OPIS, a unit of Dow Jones & Co., publisher of Barron’s,