Until there is a way for consumers to buy and receive a full tank of gas through the Internet, consumers must physically drive to stores for gas. This bodes well for Costco (COST 1.00%) as it sells gas at discounted prices, and benefits as consumers are likely to cross over between gas sales and shopping trips to the warehouse.

The hard facts
Direct exposure to gasoline sales allows Costco to stand out from its competitors as gas discounts provide a fantastic way to drive traffic and frequency for store visits. Gasoline represented approximately 11% to 12% of Costco's 2013 sales, which made this ancillary service approximately four times larger than the company's entire global e-commerce sales.

While e-commerce has been seriously disruptive to traditional retailers as consumers seek the convenience of shopping online, Costco may be immune to this trend because of its high exposure to gasoline. By selling gas, Costco creates a value proposition that no online retailer can replicate.

One of the largest investor concerns is that the next generation of shoppers (i.e the "millennials") will abandon Costco for pure online retailers. A study on the gas buying habits of millennials showed that 54% of respondents indicated that the cost of fuel was the most important factor in their gas buying habits.

While Costco isn't associated with technological savvy, the company has benefited as it continues to aggressively target the younger generation of shoppers through LivingSocial and other group buying sites.

Costco stands to continue benefiting as the company continues to roll out gas stations to virtually all new warehouses in the U.S. It is also doing this in Canada where gas costs more, which presents an even better value proposition to consumers.

Additionally, Costco is adding car washes, which along with other ancillary businesses such as pharmacies encourage members to visit the warehouses more frequently.

Miles ahead of the competition
On June 23, Wal-Mart's (WMT 0.07%) Sam's Club began offering a new cash-back credit card that offers its members 5% cash back on gas purchases, in addition to 3% cash back on travel & dining and 1% cash back on everything else.

Despite this initiative from Sam's Club, Costco appears to be performing better than Sam's Club.

For starters, Sam's Club's recent quarter, according to Wal-Mart's CEO Doug McMillon, was "tough" with lower-than-anticipated sales. Membership income increased, but this was mostly because of the membership fee increase last year.

Costco disclosed that its renewal rates for its business members and Gold Star members each rose 0.1% to 94.4% and 94.3%, respectively. Sam's Club, on the other hand, did not provide exact statistics but did note during its first-quarter conference call on May 15 that "weather related traffic trends affected sign-ups and renewals, which were soft this quarter."

Speaking of weather, Wal-Mart's executives mentioned the word weather a total of 20 times during its first-quarter conference call, blaming its poor sales on weather-related issues. Costco's executives failed to bring up weather during its third-quarter conference call on May 29.

Additionally, Sam's Club saw its first-quarter comps down 0.6% on soft traffic and ticket growth. Costco saw its U.S. comps rise 5% as international saw a 3% gain, which led to a total comps gain of 4%

Investors should question why Costco saw its membership renewal rate improve and its comps rise while Sam's Club saw its renewal rate affected by weather and posted lower comps.

Foolish take
The only way for investors to gain exposure to Sam's Club is to invest through Wal-Mart, which makes investors subject to Wal-Mart's near-term issues. For starters, 2014 and 2015 will be characterized by heavy price investments in both the domestic and international markets in addition to price investments for Sam's Club and the newly introduced cash rewards program.

Costco's investments and capex spending in the recent quarter totaled $405 million in a downward trend from $574 million in the first quarter, which implies stabilized spending that could help boost the bottom line over the coming quarters.

Costco's stabilizing capex appears to contrast with that of Wal-Mart, which will likely have an elevated capex over the coming years as the company invests in its new Neighborhood Market concept. The elevated spending, coupled with a lack of a catalyst that can drive near-term EBIT growth, may result in a lower return on capital.

Wal-Mart's investments may pay off over the long term, but Costco is offering investors a solid investment proposition today that will remain for years to come.