Wal-Mart, Discover in Gas Game

  Wal-Mart Stores Inc. has spotlighted the gas-related feature of its new Wal-Mart Discover card to stoke customer interest in applying for the plastic. The card includes a 3-cents-per-gallon discount on fuel purchased at the 700 Wal-Mart stores that also have gas stations.
  Wal-Mart officially launched the Wal-Mart Discover card in March with partners Discover Financial Services and issuer GE Consumer Finance-Americas. The cobranded card also offers up to 1% cash back on all purchases.
  "Our marketing proposition is everyday low prices," a Wal-Mart spokesperson says. "We want to build value in everything people purchase at Wal-Mart stores, and we want to install that value proposition at our gas stations as well."
  Wal-Mart is the world's largest retailer, reporting fiscal 2004 sales of $256.3 billion. Competitors often follow its lead when looking for new ways to bring in consumers.
  The Bentonville, Ark.-based merchant expects eventually to add pumps to as many of its 2,900 U.S. locations as possible, the spokesperson says. Most of the operating Wal-Mart fuel centers are leased by third parties, signed on through Wal-Mart's push to provide its shoppers with a convenient way to fill up the tank after filling up the trunk.
  "We see an increase in the number of retailers using fuel reward programs," says Betsy Tucker, senior consultant with Retail Systems Consulting in Cary, N.C. "Fuel discounts are effective for rewarding loyalty or changing consumer behavior, especially at a time of increasing gas prices."
  The big numbers under every gas station's street sign that list prices keep that cost literally and figuratively on consumers' radar screens. "People remember and discuss the price per gallon of gas, so it is an impact item that leaves a lasting impression," Tucker adds.
  Wal-Mart would not provide numbers that might prove a parallel between installing a gas station at an outlet and increased foot traffic in the aisles. However, the spokesperson says adding gas pumps has generated incremental spend inside Wal-Mart stores and purchases made with the company's private-label card.