Does Target need gas stations? How gas prices are affecting retailers like Macy’s and Costco

Yahoo Finance Live's Brian Sozzi discusses the search for cheap gas and how it's impacting retailers like Macy's and Costco.

Video transcript

EMILY MCCORMICK: It's time now for Sozzi's Take, the topic of the day our very own Brian Sozzi is keeping an eye on. And Brian, like many of us, cheap gas is what you are looking for. What have you found?

BRIAN SOZZI: Well, I still haven't actually been able to find cheap gas there, Emily, but nonetheless, you have people out there Google searching around for cheap gas. Good chart here by retail analyst over at Jefferies, Stephanie Wissink, essentially tracking Google searches for Costco gas prices, Sam's Club gas prices, and BJ's Wholesale gas prices. So why are they doing it? Because all three of these retailers, retail warehouse chains, they sell gas out of stations in their parking lots.

And you can see those searches spiked in early March when gas prices and oil prices really started to spike. Now they have declined a little bit, but still, you're still seeing oil prices remain at oil levels, as our very own Ines Ferre has reported on a little early on in the show.

But still, as this has happened, as these searches have happened here, you are seeing shares of Walmart, which, in fact, owns Sam's Club, that stock has climbed, I believe, about 12% in the past month. The market looks to be positioning for a very good quarter out of Sam's Club under the thesis members show up to Sam's Club, buy gas, park their car, go into Sam's Club instead of a Kroger, and they do all of their shopping here in this inflationary environment at a Sam's Club, instead of grocery stores.

The same thesis is likely also playing out at Costco. That stock is still hovering around a record high. Worth noting there, too, as well, it's not just the gas price thesis playing out at Costco. They're likely to raise their membership fees in a couple of months, so the market being positioned-- or positioning for that as well. Then who is this not benefiting?

You got to pull up a share-- a stock price chart of Macy's. With oil prices and gas prices still remaining high, shares of Macy's, believe or not, a very discretionary seller of merchandise, they're up-- of course, they are. They're up 5% today, Macy's, but still, they have been under pressure largely during this recent rise in oil and gas prices.

And here's my take overall. It is-- my take here is this. Does Target need gas prices, need gas stations at its stores? It's really one of those retailers that generate a lot of traffic, but again, they do not have gas stations at their stores. And you have to wonder if they are leaving a key traffic driving opportunity on the table.

And if they don't want to put in gas stations to better compete with a Sam's Club and a Costco, Emily, why not some EV charging stations? Just something to just further boost the traffic in their stores during a period of high gas prices, which is likely to stay with us for some time.

EMILY MCCORMICK: Absolutely, Brian. It's an interesting question. And I think just taking a look, Costco, of course, reports its monthly sales figures. I think you really do start to see very clearly the boon that the increase in gas prices, the fact that they have gas stations has provided for that company in particular. They just released their latest monthly sales numbers last week, and you could see that comparable sales, excluding the impact from gasoline prices, as well as foreign exchange, were up 12.7% in the US.

But if you include gas prices, they were up 19.1% domestically. So it really goes to show here that at least in the near term, at least in the past several weeks, Costco, one of those companies that you were highlighting there, really getting a benefit from those gas prices and the fact that they have gas stations.