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.
MATT OLBERDING / Lincoln Journal Star | Posted: Tuesday, September 25, 2007 7:00 pm
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.
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.