Walmart is doubling the Exxon Mobil gas discounts its Walmart+ customers get, from 10 cents to 20 cents a gallon from August 15 through September 15.

“We know that fuel savings is a huge benefit for our Walmart+ members, one that really adds up,” said Venessa Yates, SVP and general manager of Walmart+. “As gas prices have fluctuated over the last few months, we wanted to do something special to give our members a break, whether they’re hitting the road for the holiday, or just getting back into the busy back-to-school shuttling season.”

Walmart's 2x discount announcement came the same day that the American Automobile Association reported Tuesday that the national average retail price of gas in the United States had risen to $3.86 per gallon, 7% higher than a month ago and the highest yet this year. In California and Washington, prices have surged above $5 a gallon.

The Walmart-Exxon promotion will apply to roughly 12,000 Exxon Mobil stations in the U.S. for the next month.

As high gas prices and inflation have persisted in the nation and more Americans are bargain shopping, Walmart has benefitted. The world's largest retailer is set to raise its full-year earnings forecast Thursday when it reports quarterly results, as U.S. shoppers continue to buy essentials even as borrowing costs rise, lending standards tighten and the employment picture weakens.

Walmart, as measured by sales, will offer a glimpse into demand for back-to-school products.

A monthly survey conducted by brokerage Stifel in August showed that more people intend to shop at Walmart compared to Costco and Target, even as they planned to spend 16% less on back-to-school purchases this year compared to a year ago. "We find the anticipated lower spending notable and a watch-point, as it suggests continued weakness in general merchandise categories," Stifel analyst Mark Astrachan said.

Walmart is in a sweet spot among retailers as broader economic stresses push more people to shop for essentials such as groceries, its core business. Selling toilet paper, beans, pasta and toothpaste brings people into its stores, giving Walmart opportunities to cross sell more profitable merchandise including pens, notepads and backpacks.

With more and more shoppers visiting Walmart's Supercenters, Neighborhood Markets and its online website for their daily needs, the retailer issued upbeat second-quarter forecasts and raised profit and sales estimates for its fiscal year ending Jan. 31, 2024.

Rival Target, which reports results on Wednesday, in contrast expects a dour second-quarter and a drop in sales for its fiscal year. Target has a smaller grocery business than Walmart's and has focused on selling clothes, electronics and beauty products to inflation-squeezed Americans.

Many are instead spending more on dining out, hobbies and sporting equipment, as demonstrated by the latest U.S. retail sales data on Tuesday.

Home Depot on Tuesday reiterated its muted forecast for the year after it said it saw continued caution on the part of consumers towards big ticket items and discretionary categories.

Walmart, which is known for its low prices, drew in shoppers earning more than $100,000 a year during peak inflation in 2022.

Walmart CEO Doug McMillon in May cautioned that stubborn inflation, especially in food, was "one of the key factors creating uncertainty for us in the back half of the year."

Since then, food inflation has eased, however. And in July, Walmart announced that it would sell 14 of the most popular items on school supply lists, including Pen + Gear Composition notebooks and 24-count Crayola Crayons, at the same prices as last year.

"As a retail bellwether Walmart's comments on back to school trends will be a market mover as well as a preview of potential holiday trends," D.A. Davidson analyst Michael Baker said, adding that back-to-school trends have led the direction of holiday sales in 23 of the last 29 years.

UBS, Credit Suisse, Telsey Advisory Group and CFRA Research are among brokerages that expect Walmart to raise its full-year forecast for the second time this year.

Walmart in May forecast net sales would rise about 3.5% this fiscal year, up from its prior outlook in February of a 2.5% to 3% rise, in part due to higher prices. It also raised its earnings forecast.

Capital Wealth Planning, a Walmart investor, owns $258 million in Walmart shares after raising its stake in the company in June.

The firm's founder Kevin Simpson said he is hesitant to buy more stock unless the retailer can show it is able to expand margins without solely relying on inflation-driven price hikes.

Walmart trades at 24.2 times 12-month forward earnings compared to 14.9 times for Target and 19.9 times for the S&P 500 Consumer Staples index, according to Refinitiv DataStream. Simpson characterized Walmart's current multiple as "high."

"I need to see earnings increasing more than anything else because that's the only thing that can justify a higher stock price over time," Simpson told Reuters.