Latest / Omni Talk Retail / Buy Or Sell: Gas Stations Fueling Walmart’s Growth?

Transcript

Buy Or Sell: Gas Stations Fueling Walmart’s Growth? · Omni Talk Retail

• 0:00
  Walmart
• 0:00
  plans
• 0:01
  to
• 0:01
  aggressively
• 0:02
  open
• 0:03
  more
• 0:03
  gas
• 0:03
  stations
• 0:04
  over
• 0:04
  the
• 0:04
  next
• 0:05
  five
• 0:05
  years
• 0:05
  Chris
• 0:06
  According
• 0:06
  to
• 0:06
  Modern
• 0:07
  Retail,
• 0:07
  Walmart
• 0:07
  has
• 0:08
  begun
• 0:08
  a
• 0:08
  five
• 0:08
  year
• 0:09
  strategy
• 0:09
  to
• 0:09
  significantly
• 0:10
  grow
• 0:10
  the
• 0:10
  number
• 0:11
  of
• 0:11
  gas
• 0:11
  stations
• 0:12
  next
• 0:12
  to
• 0:13
  its
• 0:13
  new
• 0:13
  and
• 0:14
  existing
• 0:14
  stores.
• 0:15
  The
• 0:15
  company
• 0:16
  plans
• 0:16
  to
• 0:16
  add
• 0:16
  40
• 0:17
  to
• 0:17
  45
• 0:17
  fuel
• 0:18
  stations
• 0:18
  next
• 0:18
  to
• 0:19
  Walmart
• 0:19
  stores
• 0:20
  this
• 0:20
  year,
• 0:21
  double
• 0:21
  the
• 0:22
  20
• 0:22
  it
• 0:22
  opened
• 0:22
  last
• 0:23
  year
• 0:23
  and
• 0:24
  rapidly
• 0:24
  accelerate
• 0:25
  that
• 0:25
  growth
• 0:25
  over
• 0:25
  the
• 0:25
  next
• 0:26
  five
• 0:26
  years.
• 0:26
  Dave
• 0:27
  DeSario,
• 0:28
  Walmart's
• 0:28
  VP
• 0:28
  of
• 0:29
  fuel
• 0:29
  and
• 0:29
  convenience,
• 0:30
  told
• 0:30
  Modern
• 0:31
  Retail
• 0:31
  in
• 0:32
  an
• 0:32
  article.
• 0:33
  The
• 0:33
  total
• 0:33
  count
• 0:34
  of
• 0:34
  Walmart
• 0:34
  operated
• 0:35
  stations
• 0:36
  is
• 0:36
  currently
• 0:36
  about
• 0:36
  415.
• 0:38
  Desario,
• 0:39
  a
• 0:39
  longtime
• 0:40
  C
• 0:40
  store
• 0:41
  executive,
• 0:41
  joined
• 0:41
  the
• 0:41
  company
• 0:42
  at
• 0:42
  the
• 0:42
  beginning
• 0:42
  of
• 0:42
  2018
• 0:43
  after
• 0:43
  having
• 0:44
  served
• 0:44
  in
• 0:45
  a
• 0:45
  COO
• 0:46
  position
• 0:46
  at
• 0:46
  Tennessee
• 0:47
  chain
• 0:47
  Mapco
• 0:48
  Express
• 0:49
  and
• 0:49
  Spinx
• 0:50
  in
• 0:50
  South
• 0:51
  Carolina.
• 0:51
  I
• 0:51
  like
• 0:51
  that
• 0:51
  name,
• 0:52
  Spinx.
• 0:53
  I've
• 0:53
  never
• 0:53
  heard
• 0:53
  of
• 0:54
  that
• 0:54
  convenience
• 0:55
  store
• 0:55
  before.
• 0:56
  But
• 0:57
  before
• 0:57
  that
• 0:58
  he
• 0:58
  had
• 0:58
  been
• 0:58
  the
• 0:58
  director
• 0:58
  of
• 0:59
  store
• 0:59
  operations
• 0:59
  for
• 0:59
  Wawa
• 1:00
  and
• 1:01
  was
• 1:01
  with
• 1:02
  that
• 1:02
  company
• 1:02
  for
• 1:03
  almost
• 1:03
  two
• 1:03
  decades.
• 1:05
  Chris,
• 1:05
  this
• 1:06
  happens
• 1:06
  to
• 1:06
  be
• 1:07
  the
• 1:07
  A
• 1:07
  and
• 1:07
  M
• 1:07
  put
• 1:07
  you
• 1:08
  on
• 1:08
  the
• 1:08
  spot
• 1:08
  question.
• 1:09
  We're
• 1:10
  going
• 1:10
  to
• 1:10
  get
• 1:10
  to
• 1:10
  it
• 1:10
  right
• 1:10
  away.
• 1:11
  Started
• 1:11
  off
• 1:11
  yes,
• 1:12
  love
• 1:12
  that
• 1:12
  when
• 1:12
  we.
• 1:13
  Do
• 1:13
  that
• 1:13
  they
• 1:14
  fully
• 1:15
  expect
• 1:15
  Walmart
• 1:15
  to
• 1:15
  continue
• 1:16
  to
• 1:16
  take
• 1:16
  an
• 1:16
  aggressive
• 1:17
  low
• 1:17
  price
• 1:17
  market
• 1:18
  position
• 1:18
  on
• 1:19
  fuel.
• 1:20
  Question
• 1:20
  is,
• 1:21
  with
• 1:21
  the
• 1:21
  size
• 1:21
  of
• 1:21
  their
• 1:22
  box
• 1:22
  in
• 1:22
  the
• 1:22
  backcourt,
• 1:23
  is
• 1:23
  Walmart
• 1:24
  trying
• 1:24
  to
• 1:24
  leverage
• 1:24
  their
• 1:25
  existing
• 1:25
  customer
• 1:26
  base
• 1:26
  to
• 1:26
  sell
• 1:26
  more
• 1:27
  fuel
• 1:27
  profitably
• 1:28
  or,
• 1:28
  or
• 1:29
  is
• 1:29
  it
• 1:29
  Walmart
• 1:29
  trying
• 1:30
  to
• 1:30
  use
• 1:30
  feel
• 1:31
  fuel
• 1:32
  to
• 1:32
  drive
• 1:32
  more
• 1:33
  households
• 1:34
  and
• 1:34
  traffic
• 1:35
  to
• 1:35
  the
• 1:36
  store
• 1:37
  more
• 1:37
  fuel,
• 1:39
  not
• 1:39
  feel
• 1:40
  more
• 1:40
  fuel.
• 1:41
  Well,
• 1:41
  maybe
• 1:41
  this,
• 1:42
  this
• 1:42
  story
• 1:42
  gives
• 1:42
  me
• 1:42
  some
• 1:43
  feels
• 1:43
  and
• 1:44
  yes,
• 1:44
  yeah,
• 1:44
  I
• 1:44
  think
• 1:44
  it's,
• 1:45
  I
• 1:45
  think,
• 1:45
  I
• 1:45
  think
• 1:45
  it's
• 1:46
  decidedly
• 1:46
  the
• 1:47
  latter.
• 1:47
  You
• 1:47
  know,
• 1:47
  I
• 1:48
  think
• 1:48
  this
• 1:48
  is
• 1:48
  about
• 1:49
  getting
• 1:49
  more
• 1:49
  people
• 1:50
  into
• 1:50
  Walmart
• 1:51
  that
• 1:51
  otherwise
• 1:52
  wouldn't
• 1:52
  be
• 1:52
  there.
• 1:52
  And
• 1:52
  I
• 1:53
  say
• 1:53
  that
• 1:53
  because
• 1:53
  of
• 1:53
  really
• 1:54
  two
• 1:54
  words
• 1:54
  or,
• 1:55
  or
• 1:55
  maybe
• 1:56
  two
• 1:56
  words
• 1:56
  and,
• 1:57
  or
• 1:57
  maybe
• 1:58
  it's
• 1:58
  one
• 1:58
  word
• 1:58
  with
• 1:58
  a
• 1:58
  symbol
• 1:59
  but.
• 1:59
  And
• 1:59
  it's
• 1:59
  Walmart.
• 2:00
  That's
• 2:00
  what
• 2:00
  this
• 2:00
  is
• 2:01
  all
• 2:01
  about.
• 2:01
  Because
• 2:02
  look,
• 2:02
  we
• 2:02
  already
• 2:02
  know
• 2:03
  that
• 2:03
  fuel
• 2:03
  works
• 2:03
  as
• 2:04
  a
• 2:04
  traffic
• 2:04
  driver
• 2:04
  for
• 2:05
  Costco.
• 2:05
  It's
• 2:05
  what
• 2:05
  keeps
• 2:06
  people
• 2:06
  in
• 2:06
  the
• 2:06
  brand
• 2:07
  and
• 2:07
  keeps
• 2:07
  people
• 2:07
  coming
• 2:08
  back
• 2:08
  into
• 2:08
  the
• 2:08
  Costco
• 2:09
  stores
• 2:09
  too.
• 2:10
  And
• 2:10
  now
• 2:10
  you
• 2:11
  have
• 2:11
  a
• 2:11
  significant
• 2:11
  feature
• 2:11
  of
• 2:12
  Walmart
• 2:12
  plus
• 2:12
  being
• 2:13
  fuel
• 2:13
  discounts.
• 2:14
  They've
• 2:14
  talked
• 2:14
  about
• 2:14
  it
• 2:14
  a
• 2:14
  lot
• 2:15
  and
• 2:15
  the
• 2:16
  other
• 2:16
  competitors,
• 2:16
  you
• 2:17
  know,
• 2:17
  in
• 2:17
  the
• 2:17
  mass
• 2:17
  merchant
• 2:17
  space,
• 2:18
  specifically
• 2:18
  Amazon
• 2:19
  which
• 2:19
  doesn't
• 2:20
  have
• 2:20
  stores
• 2:20
  and
• 2:20
  Target
• 2:21
  which
• 2:21
  doesn't
• 2:22
  have
• 2:22
  fuel
• 2:22
  and
• 2:22
  has
• 2:23
  probably
• 2:23
  no
• 2:23
  designs
• 2:24
  at
• 2:24
  all
• 2:24
  to
• 2:24
  get
• 2:24
  into
• 2:24
  it,
• 2:25
  they
• 2:25
  can't
• 2:25
  touch
• 2:26
  this
• 2:26
  idea.
• 2:26
  So
• 2:26
  I
• 2:27
  $98
• 2:28
  per
• 2:28
  year,
• 2:28
  you
• 2:28
  can
• 2:28
  subsidize
• 2:29
  a
• 2:29
  heck
• 2:29
  of
• 2:29
  a
• 2:29
  lot
• 2:30
  of
• 2:30
  gas
• 2:30
  discounts
• 2:31
  and
• 2:31
  keep
• 2:31
  your
• 2:32
  customers
• 2:32
  loyal
• 2:32
  at
• 2:32
  Walmart.
• 2:33
  Plus
• 2:33
  so
• 2:33
  for
• 2:33
  me
• 2:34
  it's,
• 2:34
  it
• 2:34
  comes
• 2:34
  down
• 2:35
  to
• 2:35
  one
• 2:35
  plus
• 2:35
  one
• 2:35
  equals
• 2:36
  three
• 2:36
  retailing.
• 2:36
  You
• 2:37
  got,
• 2:37
  you
• 2:37
  get
• 2:37
  them
• 2:37
  to
• 2:38
  pay
• 2:38
  for
• 2:38
  the
• 2:38
  subscription,
• 2:38
  you
• 2:39
  get
• 2:39
  them
• 2:39
  to
• 2:39
  buy
• 2:39
  heavily
• 2:40
  discounted
• 2:40
  gasoline.
• 2:41
  Oh
• 2:41
  and
• 2:41
  then
• 2:42
  also
• 2:42
  some
• 2:42
  higher
• 2:42
  end
• 2:42
  apparel
• 2:43
  or
• 2:43
  other
• 2:43
  items
• 2:44
  while
• 2:44
  they're
• 2:44
  shopping
• 2:45
  via
• 2:45
  their
• 2:45
  Walmart
• 2:46
  plus
• 2:46
  subscription
• 2:46
  online
• 2:47
  or
• 2:47
  in
• 2:47
  your
• 2:48
  stores.
• 2:48
  That's
• 2:48
  the
• 2:48
  play
• 2:49
  here.
• 2:49
  I
• 2:49
  think
• 2:49
  it's
• 2:50
  super
• 2:50
  smart
• 2:51
  and
• 2:51
  you
• 2:51
  can
• 2:51
  tell
• 2:51
  that
• 2:52
  they're
• 2:52
  seeing
• 2:52
  some
• 2:52
  success
• 2:53
  with
• 2:53
  it
• 2:53
  too
• 2:53
  because
• 2:53
  those
• 2:54
  are
• 2:54
  some
• 2:54
  pretty
• 2:54
  big
• 2:54
  growth
• 2:55
  plans.
• 2:55
  44,
• 2:55
  45
• 2:56
  stores
• 2:56
  a
• 2:56
  year.
• 2:56
  When
• 2:57
  you
• 2:57
  only
• 2:57
  have
• 2:57
  450,
• 2:58
  I
• 2:58
  think
• 2:58
  you
• 2:59
  in
• 2:59
  the
• 2:59
  store
• 3:00
  base
• 3:00
  roughly.
• 3:00
  So,
• 3:01
  so
• 3:01
  this
• 3:01
  is,
• 3:01
  this
• 3:01
  is
• 3:02
  smart
• 3:02
  and
• 3:02
  it's
• 3:02
  a,
• 3:03
  it's
• 3:03
  a
• 3:03
  big
• 3:03
  move
• 3:03
  too.
• 3:04
  Yeah,
• 3:05
  I,
• 3:05
  I,
• 3:06
  you
• 3:06
  kind
• 3:06
  of
• 3:06
  hit
• 3:06
  on
• 3:06
  all
• 3:07
  the
• 3:07
  points
• 3:07
  that
• 3:07
  I
• 3:07
  had
• 3:08
  down,
• 3:08
  Chris.
• 3:08
  I
• 3:08
  think
• 3:09
  the
• 3:09
  thing
• 3:09
  that
• 3:10
  I
• 3:10
  would
• 3:10
  add
• 3:10
  is,
• 3:11
  I
• 3:11
  think
• 3:11
  that's
• 3:12
  still
• 3:12
  a
• 3:12
  missing
• 3:13
  piece
• 3:13
  of
• 3:13
  the
• 3:13
  Walmart
• 3:13
  plus
• 3:14
  membership
• 3:15
  is
• 3:15
  the
• 3:16
  convenience
• 3:17
  of
• 3:17
  the
• 3:17
  fuel
• 3:17
  discounts.
• 3:18
  Because
• 3:18
  there
• 3:18
  are
• 3:19
  like,
• 3:19
  especially
• 3:19
  for
• 3:20
  us,
• 3:20
  like
• 3:20
  I
• 3:20
  think
• 3:21
  in
• 3:21
  Minneapolis,
• 3:22
  like
• 3:22
  I
• 3:22
  love
• 3:22
  Walmart
• 3:23
  Plus.
• 3:23
  I,
• 3:24
  I
• 3:24
  thought
• 3:24
  that
• 3:25
  I
• 3:25
  would
• 3:25
  be
• 3:25
  using
• 3:25
  the
• 3:25
  fuel
• 3:26
  discounts
• 3:26
  but
• 3:26
  I
• 3:26
  think
• 3:27
  the
• 3:27
  closest
• 3:27
  one
• 3:27
  to
• 3:28
  us
• 3:28
  is
• 3:28
  like,
• 3:28
  you
• 3:29
  know,
• 3:29
  10
• 3:29
  miles
• 3:30
  away.
• 3:30
  Like
• 3:30
  that's
• 3:31
  too
• 3:31
  far
• 3:31
  for
• 3:32
  me
• 3:32
  to
• 3:32
  go
• 3:33
  to
• 3:33
  really
• 3:33
  get
• 3:34
  the
• 3:34
  advantage
• 3:34
  of
• 3:35
  the
• 3:35
  Walmart
• 3:35
  plus
• 3:36
  fuel
• 3:36
  discount.
• 3:36
  So
• 3:36
  I
• 3:37
  think
• 3:37
  as
• 3:37
  they
• 3:38
  start
• 3:38
  to
• 3:38
  position
• 3:38
  these
• 3:39
  in
• 3:39
  more
• 3:39
  convenient
• 3:40
  locations
• 3:41
  in
• 3:41
  the
• 3:41
  parking
• 3:41
  lots
• 3:42
  of
• 3:42
  their
• 3:42
  stores,
• 3:43
  just
• 3:43
  like
• 3:43
  the
• 3:43
  Costco
• 3:44
  example
• 3:44
  that
• 3:44
  you
• 3:45
  gave,
• 3:45
  like
• 3:45
  they're
• 3:46
  going
• 3:46
  to
• 3:46
  beat
• 3:47
  everybody
• 3:47
  else
• 3:47
  on
• 3:47
  price
• 3:48
  being
• 3:48
  Walmart,
• 3:48
  Walmart
• 3:49
  will
• 3:49
  beat
• 3:49
  everyone
• 3:49
  else
• 3:50
  on
• 3:50
  price.
• 3:50
  And
• 3:50
  if
• 3:51
  you
• 3:51
  look
• 3:51
  at
• 3:51
  the
• 3:51
  lines
• 3:51
  outside
• 3:52
  Costco,
• 3:52
  it's
• 3:52
  an
• 3:53
  exact
• 3:53
  proof
• 3:53
  point
• 3:54
  of
• 3:54
  what
• 3:54
  people
• 3:55
  will
• 3:55
  be
• 3:55
  willing
• 3:56
  to
• 3:56
  do,
• 3:56
  where
• 3:56
  people
• 3:57
  will
• 3:57
  be
• 3:57
  willing
• 3:57
  to
• 3:58
  go
• 3:58
  to
• 3:58
  change
• 3:58
  their
• 3:59
  behaviors
• 4:00
  to,
• 4:00
  to
• 4:01
  shop
• 4:01
  at
• 4:01
  so
• 4:01
  that
• 4:01
  they
• 4:02
  can
• 4:02
  get
• 4:02
  these
• 4:02
  fuel
• 4:03
  discounts.
• 4:03
  So
• 4:03
  I
• 4:04
  think
• 4:04
  that
• 4:05
  this
• 4:05
  is
• 4:05
  a
• 4:05
  tremendously
• 4:06
  smart
• 4:07
  move
• 4:07
  and
• 4:07
  will
• 4:07
  only
• 4:08
  continue
• 4:08
  to
• 4:09
  kind
• 4:09
  of
• 4:09
  catapult
• 4:10
  this
• 4:10
  Walmart
• 4:11
  plus
• 4:11
  membership
• 4:11
  like
• 4:12
  you
• 4:12
  said.
• 4:12
  So
• 4:12
  just,
• 4:13
  just
• 4:13
  feeding
• 4:13
  the
• 4:13
  flywheel
• 4:14
  with
• 4:14
  those
• 4:14
  key
• 4:15
  areas
• 4:16
  of
• 4:16
  differentiation
• 4:17
  and
• 4:17
  discounts.
• 4:18
  Yeah,
• 4:19
  that's
• 4:19
  a
• 4:19
  great
• 4:19
  point
• 4:19
  because
• 4:20
  when
• 4:20
  you
• 4:20
  put
• 4:20
  it
• 4:20
  in
• 4:20
  that,
• 4:20
  in
• 4:21
  those
• 4:21
  terms
• 4:21
  like
• 4:21
  you
• 4:21
  just
• 4:21
  did.
• 4:22
  Yeah,
• 4:22
  if
• 4:22
  there's
• 4:22
  only
• 4:23
  four,
• 4:23
  I
• 4:23
  think
• 4:23
  I
• 4:23
  look
• 4:23
  back
• 4:23
  at
• 4:24
  the
• 4:24
  exact
• 4:24
  number
• 4:24
  you
• 4:24
  quoted.
• 4:25
  415
• 4:25
  stores
• 4:26
  currently
• 4:26
  have,
• 4:27
  you
• 4:27
  know,
• 4:27
  gas
• 4:27
  stations
• 4:28
  out
• 4:29
  front
• 4:29
  of
• 4:29
  them
• 4:29
  and
• 4:29
  you
• 4:29
  know,
• 4:30
  the
• 4:30
  Walmart
• 4:30
  store
• 4:30
  base
• 4:31
  is
• 4:31
  4,600
• 4:32
  plus
• 4:32
  stores.
• 4:32
  So
• 4:33
  that's
• 4:33
  like
• 4:33
  less
• 4:33
  than
• 4:34
  10%
• 4:34
  of
• 4:34
  the
• 4:34
  store
• 4:34
  base
• 4:35
  where
• 4:35
  the
• 4:35
  actual
• 4:36
  fuel
• 4:36
  discount
• 4:36
  through
• 4:37
  the
• 4:37
  Walmart
• 4:37
  plus
• 4:37
  membership
• 4:38
  is
• 4:38
  actually
• 4:38
  available.
• 4:38
  So
• 4:39
  tremendous
• 4:39
  opportunity
• 4:40
  here.
• 4:40
  And
• 4:40
  then
• 4:40
  the
• 4:40
  last
• 4:41
  point,
• 4:41
  and
• 4:41
  as
• 4:41
  we
• 4:42
  learned
• 4:42
  last
• 4:42
  week
• 4:42
  Vanessa
• 4:43
  Yates,
• 4:43
  formerly
• 4:44
  the
• 4:44
  head
• 4:44
  of
• 4:44
  Walmart
• 4:45
  plus,
• 4:45
  is
• 4:45
  now
• 4:45
  the
• 4:45
  CEO
• 4:46
  of
• 4:46
  Walmart
• 4:46
  Canada.
• 4:47
  So
• 4:47
  my
• 4:48
  hunch
• 4:48
  is
• 4:48
  Walmart
• 4:48
  plus
• 4:49
  is
• 4:49
  doing
• 4:49
  very,
• 4:50
  very
• 4:50
  well
• 4:50
  and
• 4:51
  they
• 4:51
  are
• 4:51
  let
• 4:51
  all
• 4:52
  systems
• 4:52
  go
• 4:53
  on
• 4:53
  this
• 4:53
  idea.
• 4:54
  Wouldn't
• 4:54
  you
• 4:54
  think
• 4:54
  so,
• 4:54
  Ann?
• 4:55
  Yeah,
• 4:55
  I
• 4:56
  mean,
• 4:56
  I
• 4:56
  totally
• 4:57
  agree.
• 4:57
  I
• 4:57
  think
• 4:57
  the
• 4:58
  benefits,
• 4:58
  like,
• 4:59
  they,
• 4:59
  they
• 4:59
  just
• 4:59
  continue
• 5:00
  to
• 5:00
  get
• 5:00
  better
• 5:01
  and
• 5:01
  they
• 5:01
  will
• 5:02
  continue
• 5:02
  to
• 5:02
  bring
• 5:02
  in
• 5:03
  more
• 5:03
  and
• 5:03
  more
• 5:03
  members
• 5:04
  because
• 5:04
  it's,
• 5:04
  it's
• 5:04
  an
• 5:05
  undeniable
• 5:05
  value
• 5:06
  for
• 5:06
  that
• 5:07
  98
• 5:07
  a
• 5:07
  year.