Now
Fair
52°
High
51°
Low
29°
Full Forecast

Jobs

Cars

Homes

Rentals

Alerts

Subscribe
Home > News > Business
Bookmark Us   •   Make Us Your Homepage

Gas at Sam's Club could lower prices elsewhere

Comments 77 comment(s)  
E-mail Story E-mail Story
Print Story Print Story
Share  Share
Text Size: 
Tools Sponsor

BY MATT OLBERDING / Lincoln Journal Star

Wednesday, Sep 26, 2007 - 11:47:49 pm CDT

Sam’s Club is planning to sell gasoline in Lincoln for the first time, a move that some in the industry say could lead to lower gas prices in the city.

The discount warehouse store is building a gas station with six pumps on its grounds at 4900 N. 27th St. that is expected to open in November, said Kristy Reed, a spokeswoman for Wal-Mart, which owns Sam’s Club.

According to a building permit filed with the city, the company is spending $250,000 on the station.

Story Photo
These fuel pumps will be installed at a gas station under construction at Sam's Club on North 27th Street. (Ted Kirk)

Reed said Sam’s Club is adding the gas station to “better serve our members in the Lincoln area.”

The station will be available for use only by Sam’s Club members, but it may in the end benefit all Lincoln drivers.

That’s because Sam’s Club and other discount warehouse stores such as Costco use gas sales as a “loss leader,” meaning they sell it at or below cost to drive traffic to their stores. That often allows them to sell it at  a lower price than competitors, which puts downward pressure on local prices.

AAA spokeswoman Rose White said the addition of Sam’s Club selling gas in Lincoln will increase local competition, “and competition is a big factor in the prices that are paid at the pump.”

In Omaha, competition from Sam’s Club has been cited as one factor for why gas prices there are often 10 to 15 cents a gallon cheaper than in Lincoln.

On Wednesday, gas was 9 cents cheaper on average in Omaha than in Lincoln, according to AAA. But the lowest price listed in Omaha was 20 cents lower than the lowest price listed in Lincoln, according to www.gasbuddy.com.

Mark Whitehead, president of Whitehead Oil in Lincoln, which operates several U-Stop convenience stores, said he knows how important price can be for drivers.

“Price is certainly a significant component of customers’ decisions” on where to buy gas, Whitehead said.

He said gas pricing already is very competitive along the North 27th Street corridor, and while he expects Sam’s Club will have some effect, he’s not sure how big it will be.

Whitehead, whose company owns three U-Stops near Sam’s Club — at 33rd Street and Cornhusker Highway, 33rd and Superior streets and near 27th Street and Fletcher Avenue — is ready to do battle if need be.

“If (Sam’s Club) is posting an extremely low price … we’ll need to look at how to respond,” he said.

Reach Matt Olberding at 473-2647 or molberding@journalstar.com.


$1 Sunday Delivery - Subscribe Today!
Business > Back to Top of Story

Post Your Comment

Standards and Rules
All posts to JournalStar.com are subject to our Terms and Standards.
Your posted comment will appear after it has been approved.
Frequently asked questions about story commenting.
(optional)
   
Hide Comments Hide Comments   Newest First Newest First  
fomer lincoln resident now in DFW... wrote on September 27, 2007 2:02 am:
" this will work out very well for Lincoln residents. i know first hand living in dfw and previously in houston, these prices will lower EVERYBODY, and if stations choose not to lower to meet sam's club's prices, sam's wins in the end. it MAY cost more initially, but in the long run, it would be worth it. the only way this could have been better is if walmart itself opened this station. and no colleen seng to gouge another gas tax to make up for it. win win situation!! "

 yes! wrote on September 27, 2007 2:23 am:
" It's about time. "

 Yep..... wrote on September 27, 2007 4:41 am:
" even though I don't agree with the some of the policies of Wal-Mart. It's about time the Whitehead oil had a bit MORE competition in this town. They have had a stranglehold on fuel here for FAR TOO LONG. "

 mmmmm.... wrote on September 27, 2007 6:53 am:
" I wonder who will be coming out of the woodwork to say Walmart is bad this time. "

 Yeah wrote on September 27, 2007 7:30 am:
" Go Sam's Go!! "

 Straight Thinker wrote on September 27, 2007 7:35 am:
" I commute daily to Omaha for work...and I always fill up in Omaha or Council Bluffs. It is CONSISTENTLY anywhere from 10 to 35c cheaper per gallon. I have filled at Sams in Omaha and Des moines and often in Kansas and it is almost always the cheapest in town, so go Sams! (And they have the same price on every pump!) "

 Lisa (former employee) wrote on September 27, 2007 8:13 am:
" Sam's Club has been trying to get gas pumps there for years. I absolutely love it. Even if I never shop inside the store (which of coarse I do) I would still spend the $35/$40 for the gas. I just hope there are enough pumps. "

 relieved wrote on September 27, 2007 8:16 am:
" Thank you Sam's Club!!! It is about time someone steps out of the "good ole boy network" when it comes to gas prices in Lincoln. "

 50 dollars for gas every 2 weeks wrote on September 27, 2007 8:17 am:
" Good because I'm tired of getting price gouged. I know some of it is on the refineries and their lack of incentive to build more refineries or to insure some stability in production. I'll still take any price relief I can get after the 30 to 40 cent price hike we seen recently due to flooding along the Missouri river in Kansas that shut down the Kansas refineries. "

 Thank you Sams wrote on September 27, 2007 8:37 am:
" Finally....someone not looking at the profit, but rather at the customer base. Sams has the right idea here, just really hope they keep it up. Its no secret the Whitehead does not give a crap about the consumer, just about his wallet. So, Mr Whitehead, I hope this hits you where it hurts. "

 Nina wrote on September 27, 2007 8:37 am:
" Something should lower Lincoln's prices, when Omaha prices are 20 cents a gallon cheaper, and Nebraska City prices are 17 cents cheaper. Even small-town gas stations along Hwy 2 - Palmyra, Unadilla & Syracuse in my area, have lower prices than Lincoln. So I avoid buying gas in Lincoln stations on my daily commute of 50-plus miles. "

 SB wrote on September 27, 2007 8:39 am:
" OH GREAT, that’s gonna take away parking spots at Walmart. When will they offer free lypo with a new membership? "

 Josh wrote on September 27, 2007 9:14 am:
" Gas prices competitive on the north 27th street corridor? I don't think so, gas there (especially from the Wal Mart/Sam's Club area all the way up to I-80) is usually about 10 cents higher than in other areas. I'm glad Sam's will be pushing prices down, I can't wait until this station opens! "

 Deb wrote on September 27, 2007 9:24 am:
" I think this is great. Thank you Sam's! Lincoln could really use some competition at the pump. Our local gas station owners have adopted the attitude that they will charge whatever they want, because they can. This is excellent. I would happily drive 10-15 minutes out of my way to fill up at a price that sticks it to these greedy gas guys! "

 Steve U wrote on September 27, 2007 9:50 am:
" Whoo Hoo! Love Sam's Club!! "

 TSG wrote on September 27, 2007 9:58 am:
" When the South Wal-Mart was being built in Lincoln they planned on building a gas station on their grounds. But the contractor of Wal-Mart said it would be a bad idea because it would take away alot of other things. Then I found out that the contractor didnt want the gas station there because he had purchased the land across Hwy 2 and was planning on putting in his own gas station (The Mobil station). Low and behold, Wal-Mart listened, and the guy got his station....this a GREAT idea Sam's!!! "

 pac wrote on September 27, 2007 10:01 am:
" If it pans out, Sam's Club will be getting a new member in me! "

 VOR wrote on September 27, 2007 10:08 am:
" Looks like the Lincoln "Gas Czar" will loose a little bit of his clout...... "

 confused wrote on September 27, 2007 10:31 am:
" First off, the gas station is not in the WalMart parking lot, but to the South of Culvers. And where does lipo come into play with a membership to Sam's? I applaud Sam's Club for putting in the station and hope that it does help out ALL of Lincoln in lowering prices for gas. "

 PROGRESSIVE wrote on September 27, 2007 10:31 am:
" Got any ethanol dispensers, Sam's Club Board? "

 as wrote on September 27, 2007 10:49 am:
" Almost worth joining it just to be able to get the cheaper gas. Can't wait to see the expressions from Whitehead & all the other far too powerful monopolizers when they see the prices. Go Sams!! For those who are concerned, if you look at where the station is being built (next to Culvers) it will not result in the loss of parking spaces in the Walmart lot. "

 Sheri wrote on September 27, 2007 11:06 am:
" It's up by Culver's in the section of Sam's Club parking lot along 27th St which was only used occasionally, so it will not take away Wal-Mart parking spots. "

 Don wrote on September 27, 2007 11:16 am:
" Where's all the anti-Walmart critics at now? Cause we all know noting good could ever come out of a Walmart or Sams..... "

 JJ wrote on September 27, 2007 12:50 pm:
" Actually Sam's is looking at the profit, just not the one they get on gas. They will bring in more business by enticing you with cheap gas. That makes them more money on the other goods they sell. It is always about the profit, otherwise you all wouldn't be complaining about how much money you are spending. You want a bigger profit margin at home don't you. Basic economics. "

 JAZZY wrote on September 27, 2007 1:11 pm:
" This is great...... I love it. This lot was a home for only overnight semi parking and now with a gas station in it, this will be better. Thanks Sams club. "

 Guess Again wrote on September 27, 2007 1:26 pm:
" I'm not opposed to this but if you think that they aren't doing this for profit - read the article again. That whole part about using gas as a 'loss leader?' You get done filling up and then you head into the store. It still equals profits for Sams. "

 BEATRICEBABE wrote on September 27, 2007 1:53 pm:
" Yea, another reason for me to continue to shop in Lincoln. The last time in Lincoln, I filled up for 2.69 when it was 2.87 in Beatrice. Maybe after the Sam's pumps go in, the difference in Beatrice price and the price at Sam's, after a couple fills will pay for those boots I want at Von Maur!!! "

 Bubba wrote on September 27, 2007 1:53 pm:
" Ride a bike, cars are coffins. "

 Rob wrote on September 27, 2007 1:59 pm:
" JJ - Thanks, but I believe that is what a "loss leader" is. As mentioned in the article. "

 Not a savings wrote on September 27, 2007 2:17 pm:
" How is this not profit motivated? Surely you will have to have a membership which costs ultimately negating any savings you will see. Besides, shopping at Sam’s doesn’t save money. Having shopped there the benefit to shopping is the ability to get goods in bulk. If you are a savvy consumer the better deals are found within the locally owned shops. Plus if feel better about keeping local Americans employed as opposed to sending my money to Arkansas via China. Wal-Mart and Sams, you can keep them, me and my family are Lincoln first. "

 pdl wrote on September 27, 2007 2:29 pm:
" What kind of revalation is that? "Price is certainly a significant componant of customer's decicions". Duh People drive across town to get a cheaper gas price. Didn't they supposedly make most of their money on things people would buy after they bought gas? Since they are making so much on the gas they need another "loss leader" to draw people to their stations. Overpriced gas outside, cheap beer inside. "

 Bad Bad Leroy Brown wrote on September 27, 2007 2:34 pm:
" Oh Walmart is so bad. Oh they are so bad... "

 JAZZY wrote on September 27, 2007 2:51 pm:
" JJ ---- if you don't know. the station is located across the street to the west of the sam's club, so you don't even have to enter the store to get the gas. "

 I agree wrote on September 27, 2007 3:04 pm:
" " If it pans out, Sam's Club will be getting a new member in me! " Ustop gas is expensive. "

 willy wrote on September 27, 2007 3:06 pm:
" Good Luck. By lowering the gas a few cents, it will open the door for the city to add more tax. By a station selling a few cents cheaper it only disquises the fact that nebraska and especially are the HIGH TAX STATE. One good thing is that it's on the North Side of Lincoln so the poor folks can get a break. "

 Hooray Competition! wrote on September 27, 2007 3:11 pm:
" Thanks for competing Sam's. Now, is there anyway you could offer cable/Internet service too to end the other major Lincoln monopoly? "

 DD wrote on September 27, 2007 3:15 pm:
" Gas might be cheaper per gallon at Sams, but when I used to fill up there, it always took almost a gallon more than anywhere else. Cheaper, hmmmmm "

 What about? wrote on September 27, 2007 3:26 pm:
" Didn't Jon Bruning have a report saying there wasn't price gouging in Lincoln? Doesn't Mr. Whitehead's quotes reveal the opposite? "

 I also blame... wrote on September 27, 2007 3:53 pm:
" I also blame pay at the pump as another reason for higher gas prices. If people go in there are more likely to buy something else. Thus in the past gas stations made extra profit on the highly priced convenient items/snacks. Now they have to make almost all their money on gas sales as most people pay at the pump and don't even go in (I say most, not all, some still go in). "

 Doug wrote on September 27, 2007 4:09 pm:
" Where do you get gas Josh, at the I-80 interchange? Of course it is higher there. Gas at 35th and Superior or across from Northstar High School are consistently the cheapest in Lincoln. Get your facts straight. Also, how is this going to make parking worse at Wal-Mart? This is way northwest of the parking lot and last time I checked you aren't allowed to park at the pump. Sams is a great place to shop, I hope the cost is as big a savings as people are hoping for. Go Sam Walton, go. "

 Nina wrote on September 27, 2007 4:23 pm:
" Many Sam's memberships are free, because corporate entities offer them to their employees. We shop there occasionally because of that, although we're more south Lincoln shoppers usually. So far as it taking more gas to fill up there than at other places, a state agency measures the accuracy of each pump and puts a certification stamp on it. All stations are monitored this way - no favoritism. So it's highly unlikely there's any variation in the calibration among all those in Nebraska. "

 CS wrote on September 27, 2007 4:28 pm:
" It costs a whopping 20.00 a year to join Sam's Club. Im pretty sure I can recoup that between what I save buying lunch staples and filling up the minivan and my wifes car. "

 the pumps are checked wrote on September 27, 2007 4:51 pm:
" all pumps are checked for accuracy at least once a year by the state. So I doubt that yuo are putting in another gallon compared to other stations. this is good news to Lincoln. "

 Not quite right wrote on September 27, 2007 4:55 pm:
" Sorry DD, but all gas pumps are inspected (and reinspected) for accuracy. Sam's pumps measure a gallon the same as Whitehead's. "

 Suckers wrote on September 27, 2007 4:57 pm:
" So you are going to pay a membership fee to buy gas. When your job is outsourced by a supplier trying to lower prices for Walmart you won't be able to buy the lead paint toys for your children that Walmart forced Mattell to produce in China to lower your prices. I'll continue to support locally owned business. "

 ECON 101 wrote on September 27, 2007 4:59 pm:
" Great, competition always leads to better offers to the consumers. Also again...Someone please tell me who\how price gouging exists? It does not! "

 SB wrote on September 27, 2007 5:21 pm:
" I guess I was too harsh on my first response – the loss of parking comment comes from Walmart’s greed for endless parking that never fills and since I can’t say anything nice about explaining the lypo comment and the average Walmart shopper I won’t say anything at all (my ma taught me that). I encourage you to check out PBS’ online documentary on Walmart (don’t worry it’s unbiased unlike my commentary). "

 SB wrote on September 27, 2007 5:27 pm:
" Perhaps you should blame yourself (not some far fetched theory about price gouging or pay at the pump) for high gas prices/demand. Think about it – this is a free trade commodity that wars are fought over, subsidized by the government, and provided at half the cost then the rest of the world pays. Even as prices rose this summer we increased our consumption of gasoline as a country. You are granted the constitutional right to free speech (ignorant as said speech may be) but not to cheap gas. "

 No way. wrote on September 27, 2007 5:50 pm:
" For those who complain about high gas prices and high taxes...boo hoo. GET A NEW & HIGHER PAYING JOB. "

 ... wrote on September 27, 2007 6:58 pm:
" Oh no, just another example of Wal-Mart running the little man out of business. Oh wait, no one cares if it comes to gas "

 Bubba wrote on September 27, 2007 8:11 pm:
" I don't understand how this can lower the other station's price. I thought it was all based on the cost to produce, to deliver and a few cents profit. WAIT are you saying they were making more than a few cents profit? "

 Stick it to Whitehead Sam's! wrote on September 27, 2007 8:47 pm:
" I'm going this weekend to buy a membership. I won't even spit in a U-Stop parking lot, much less put money in his pocket. I could care less what Sam's motivation is, I love it, and I'll be a customer. "

 CS wrote on September 27, 2007 9:07 pm:
" Walmart and Sam's don't drive anyone out of business-im sure if the 'little' guy's product was so important that customers would continue to flock to them. If you can't support capitalism in action, even when it doesn't favor those that can't compete, then maybe you should move to some other place where all the 'little' guy's are the same. "

 wait wrote on September 27, 2007 9:14 pm:
" is the city of lincoln really complaning about a possibility of lower gas prices? "

 illegal wrote on September 27, 2007 10:57 pm:
" "Sam’s Club and other discount warehouse stores such as Costco use gas sales as a “loss leader,” meaning they sell it at or below cost" -LJS Isn't it illegal to sell below cost? "

 got gas? wrote on September 27, 2007 11:52 pm:
" gas in north lincoln is much cheaper, as much as 20 cents, than in south lincoln; it's sad that a person can drive 10 miles to waverly and gas is 10 cents cheaper there... "

 Yahoo wrote on September 28, 2007 6:20 am:
" Don't care why they're doing it. Don't understand all the economics behind it. If it lowers gas prices, I'm all for it. Thanks, Sam's!!!! "

 Mike in DC wrote on September 28, 2007 8:18 am:
" If they have an affect on the WHOLESALE price of gas that's great; but uh, local gas stations don't make much money (pennies a gallon) on the actual gas--they make money YOU coming into the store to buy cigs, or drinks, or snacks. Much like many seasonal items at discount department stores (school supplies are oft dumped--which is only slightly illegal--sold for less than cost--and placed in the back of the store to get you into the store AND walk through the entire store to get to it), Sams won't make any direct money on the gasoline. The carrot is to get donkeys to come that extra few miles and shop at Sams/Walmart too. "

 Word wrote on September 28, 2007 8:19 am:
" The best part about this, is that it is a win-win situation. People love sam's. Great, they are bringing in cheaper gas. This will drive the price down for all the other stations. The people that love supporting local business still can. The prices should be similar. Also for people that don't want to buy a membership, don't. I am sure gas will be the same price right across the street. "

 peb wrote on September 28, 2007 8:23 am:
" Cheap gas doesn't negate the bad practices WalMart is and has been guilty of for years. "

 DC wrote on September 28, 2007 8:48 am:
" So you people are saying it would be worth driving 15-20 minutes each way to save what 10 cents a gallon? If you get 20 gallons you save a whole whooping 2 bucks. For a 30 minute round trip commute (for you simple minded folks 15 minutes there + 15 minutes back is 30 minutes). My time is worth a whole heck of a lot more than $4 an hour to try and get the best price in town, not to mention the gas I just wasted driving to get that cheap gas. "

 Doug wrote on September 28, 2007 8:52 am:
" I love the talk about the little guy. Who is this gas little guy you speak of. Well let's see. Here is today's top 5 in the Fortune 500. 1. Wal-Mart Stores 2. Exxon Mobil 3. General Motors 4. Chevron 5. ConocoPhillips Walmart is up there by selling things at reasonable prices to the average consumer. What about the others? They are at the top because they gouge prices so badly that their profit margin is huge. Those who say we should be paying higher prices for gas like they do in Europe do not know what they are talking about. All you would be doing is lining the pockets of these companies and moving them higher up the list. "

 So why... wrote on September 28, 2007 9:18 am:
" If the gas stations aren't making money on the gas, why don't they lower the price and then do creative marketing to sell their other products? You can bet if a gas station has even a 3-5 cent lower price than the surrounding stations - I'll go there AND buy my soda/snacks!!! LOWER YOUR PRICES AND WE WILL COME TO YOUR STATION!!! "

 I wrote on September 28, 2007 9:21 am:
" *laughing* Someone will always find something to b!tch about. Save money on gas, or have a hard time finding a parking spot at Walmart? Personally, I'll give up a few parking spots. "

 Cj wrote on September 28, 2007 9:32 am:
" What?...A business working hard to benefit the consumer!!...Thats AMAZING! "

 KB wrote on September 28, 2007 9:46 am:
" Finally competition in Lincoln. However, most stores mark something down and put the price increase on something you least expect. You grab a jar of peanut butter and never notice the price went up a few cents, or why were bananas 46 cents last week and 59 cents this week! The sad part is the local guy has to pay these out of sight taxes all by himself!!! The high property taxes are whats killing everybody which forces everything to be so high! "

 Josh wrote on September 28, 2007 12:06 pm:
" Sorry Doug, I do have my facts straight- yes, gas even at that 35th and Superior area and others nearby ARE higher than the other places I normally go for gas. True, not as high as at the I-80 interchange, but still almost always higher than what I can get out at West O or even in Airpark. "

 Ol' Farmer wrote on September 28, 2007 12:18 pm:
" Gosh, I hope it's not illegal to sell below cost, because we did that with our corn and beans for about 20 years. Retired from farming now, but working full time in town to stave off 'old age,' and pay farm debt. "

 HELLO wrote on September 28, 2007 12:48 pm:
" The point is that it will lower prices everywhere, not just at that store. If you don't agree with Wal Mart/Sam's, don't shop there. But also don't be surprised if suddenly the prices drop elsewhere to keep up. Apparently some poeple already have memberships because Sam's is still open, so if it is 5 cents cheaper a gallon and they already have a membership, where do you think they will get gas? This will force the other companies to to lower their prices because their demand curve will shift down (for those of you spouting econ, trying using real econ examples for once, not just the same old BS pulled off a headline). As for the gouging, the price difference between Lincoln and smaller cities around it pointed to that. Why was gas 20 cents cheaper in Ceresco than in Lincoln? I have NEVER seen that prior to this summer. Explain how that is not gouging. Yes, Lincoln is higher than Omaha (about 14-15 cents right now) primarily due to downtown Omaha having to compete with Iowa- their demand is greatly influenced by price and competition, so yes, they do charge less to keep the level of demand they are striving for. And yes, it will be cheaper than here due to location. Long story short, whether or not you shop at Sam's in the long run this should save everyone some at the pump. "

 denise wrote on September 28, 2007 2:01 pm:
" our walmart sells gas, and they are just as expensive as all the other stations in town (more expensive than some)...but in a neighboring town, gas is 7-10 cents cheaper because of Costco! go figure!! "

 Brian in Lincoln wrote on September 28, 2007 2:41 pm:
" Selling gas does make money, the owner dictates just how much ! I own Casey's stock, and in their shareholder report, they show that they average a profit of 0.12 on every gallon of gas they sell. So, for every car/truck that puts in 10 gallons that is $1.20 they make, not a bad take on their end, considering they sell thousands of gallons of gas a day. If being a gas station was such a bad/ risky business, they would not be EVERYWHERE!! It is about time the Good Ole Boy network in Lincoln takes a hit.... "

 pdl wrote on September 28, 2007 2:47 pm:
" I don't see how it can be illegal to offer something cheaper than anyone else is offering it. EVERY store does it. That's why you comparison shop. But that's the draw, they get you to go there with a discounted item and HOPE you spend more on something else. Normal business practice, yes. Successful strategy, yes. Illegal, if it is, I don't think so. A fool and their money are soon parted. "

 hickman resident wrote on September 28, 2007 3:23 pm:
" I just learned in our local paper that the "gas czae" of lincoln just bought our local gas station. This does not give me much hope now of cheaper gas. Last weekend I too filled up in Omaha for $2.56 a gallon. Most stations in Lincoln were still at $2.79. Can someone please explain why this is always the case. Please, Mr. Whitehead, give the common people a break. "

 misinformed wrote on September 28, 2007 3:28 pm:
" You all are misinformed. Didn't anyone hear Whitehead oil say they charge what the market will bare. So if Sam's prices are lower and Whitehead lowers his price don't we all win. It's just that whitehead will not be ripping us off as much, oh oh I mean making as much profit. "

 Does anyone know? wrote on September 29, 2007 12:22 am:
" this idea of stations only marking up the price of gas pennies a gallon is nuts i personally do not own a station but i have a close family member that does and he marks his up anywhere from 15 cents to 20 cents per gallon and his prices our in line with other stations "

 Well worth wrote on September 29, 2007 9:48 am:
" for me I def. will become a Sams member when that happens! Thanks! "

 BurnAlcohol wrote on October 3, 2007 5:57 pm:
" I wonder if they will install E85? They could sell it at the right price without having the oil company as the middle man jacking the price up. It would be great if they installed blender pumps. It would make it even cheaper. Blender pumps can be set up to blend E10 though E85. They usually give the customer the 51 cent/gallon blending credit. Other stations pocket the 51 cents for them selves. "

Ads by Yahoo!