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FinanceCostco opens standalone gas stations due to high demand and space constraints
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Costco is opening standalone gas stations separate from its warehouses to meet high customer demand for discounted fuel. The first station is operating in Southern California, with a second planned for Honolulu, both located a mile or two from the nearest Costco store. CFO Gary Millerchip explained the move addresses capacity constraints at existing warehouse gas stations or the inability to add pumps on the same premises. CEO Ron Vachris reported that the five weeks ending mid-May were the highest gas-sales weeks in company history, and first-time fuel customers tend to increase overall spending. The retailer continues to see strong member engagement, with other products like a retro Esprit fleece crewneck also selling out quickly.
Source report
Costco's famously popular gas pumps have driven the retailer to open its first standalone gas station—entirely separate from any warehouse store—to meet customer demand.
According to the Wall Street Journal, Costco is now operating a standalone station in Southern California, with a second location planned for Honolulu. Both sites are situated one to two miles from the nearest Costco warehouse.
Why Standalone Stations?
"They're really intended to either alleviate some of the capacity constraints in the gas station that exists at the warehouse today or we just can't get a gas station on the same premises," said Costco CFO Gary Millerchip.
The new stations will maintain Costco's signature discounted pricing, even as fuel prices continue to rise.
Record Fuel Sales
CEO Ron Vachris told investors that the five weeks ending in mid-May marked the highest gas-sales weeks in company history. During that period, Costco attracted members who used its pumps for the first time. Vachris noted that these first-time fuel customers tend to spend more overall.
Additional Retail Momentum
Costco has also seen strong demand in other categories. A retro 1980s Esprit fleece crewneck completely sold out over the weekend, adding to the retailer's recent string of wins.
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Source
Yahoo FinanceWestern
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