There’s a familiar story retailers tell themselves about high gasoline prices: When Americans spend more at the pump, they spend less in stores. The math seems obvious. A tank of gas that costs $80 instead of $50 leaves $30 less to spend on a new blouse or a kitchen gadget. Spending at retail suffers. End of story.
The reality, as it turns out, is a bit more complicated.
As average U.S. gas prices climbed from roughly $2.80 per gallon in early January to around $4.50 by mid-May — a surge tied in part to the Iran conflict — foot traffic data from the location analytics firm Placer.ai shows that there was a real impact on shopping behavior. But not all retailers are affected in the same way.
What’s not surprising is that visits to gas stations declined nationwide as prices pushed past $4 per gallon, with traffic down nearly 6% year over year during the week of May 18. And it wasn’t just gas stations that were affected. Discretionary retail traffic overall slipped below prior-year levels starting in late April. By mid-May, even non-discretionary chains saw their traffic fall below year-ago comparisons. The interpretation is straightforward: Consumers are driving less, consolidating errands and making deliberate choices about which trips are worth taking. Every retail location that depends on casual, unplanned visits — the spontaneous stop, the browse without intent to buy — is feeling the pressure.
Now for the unexpected news: Wholesale clubs are booming.
Placer.ai data shows foot traffic for the week of May 18 was up 14.5% at BJ’s Wholesale Club, 10.6% at Sam’s Club, and 5.9% at Costco — all at a time when the broader retail industry was losing ground. Gasoline itself is part of the reason. Wholesale clubs have long offered members discounted fuel as a core part of their value proposition, and when pump prices spike, that discount suddenly feels urgent rather than merely convenient. Costco chief executive officer Ron Vachris reported that all three four-week fiscal periods in the company’s most recent quarter set successive all-time fuel volume records. Walmart chief financial officer John Rainey noted that Sam’s Club gasoline gallons sold in May were up 12% — against an industry that was down 5%.
These numbers matter beyond just the impact at the fuel pumps. As Rainey noted, a Sam’s Club fuel member spends 1.6 times more on the rest of the basket than a non-fuel member. Costco’s CFO echoed that logic: Members who visited a Costco gas station for the first time this quarter are now more engaged with the brand overall. High gas prices, counterintuitively, may be deepening the relationship between wholesale clubs and their members.
Dollar General’s story offers another wrinkle. While most retailers saw traffic soften, the discount chain posted same-store foot traffic gains of 4.8% in February, 1.9% in March, and 2.3% in April. The company’s hyper-local store footprint — with thousands of small-format locations in communities where the nearest Walmart or Target might be a 20-minute drive — becomes a genuine competitive advantage when fuel is expensive. Why drive across town when the dollar store is three blocks away?
The lesson here is that rising gas prices are not simply an across-the-board tax on consumer spending in retail stores. They are a sorting mechanism — one that rewards those retailers that offer tangible, demonstrable value and penalizes those whose selling propositions depend on discretionary impulse buys. Club membership fees that seemed borderline worth it when gasoline was selling at $2.80 per gallon look like a bargain when the price for nonmembers is $4.50 per gallon. And a nearby store that was once merely convenient now becomes genuinely necessary.
No one likes higher fuel prices, but obviously some households are better able than others to cope with the financial strain. And likewise, some retailers are better positioned to win with those consumers for whom the higher prices are catastrophic, as well as with those for whom they are just annoying.
