Costco follows the same recipe in every market, but can be known to bury the ingredients.
Your warehouse, club may have a tire and auto parts store, mine has a liquor store. Some of those liquor stores, which are open to non-members in some states, have an entirely separate entry.
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However, they are set up, they offer a mix of name brands and House brand products. Costco uses its Kirkland brand to offer high-quality wines and liquors at very low prices.
Costco does not explain how it decides what extras to offer at any particular location. In some cases, the choices may be made by the company, simply not having enough space to add store within a store concepts.
That’s especially true of the chain’s gas stations. Those can take up a lot of room and while they are highly priced by members, some older locations simply do not have the space.
Costco wants to have a gas station at every location. Its low gas prices are very attractive, and that drives customers to visit more often.
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Cheap gas could also be a major factor in someone deciding whether or not to renew their membership. If you get gas weekly from Costco, the savings can actually pay for your membership..
Now, the chain has decided to test something that will make its members very happy.
Costco usually offers the cheapest gas in any town.
Image source: Kevork Djansezian/Getty Images
Costco tries a standalone gas station
Not every Costco location has room for a gas station. In fact, some of the chains most popular locations cannot offer gas because they are already maxing out their parking lots.
That’s a problem that the membership-based warehouse club has a new solution for.
The chain plans to build its largest-ever gas station in Mission Viejo, California. It will also be a standalone location not connected to one of its stores.
Costco’s first-ever standalone gas station will only be open for members.
The station will have 40 pumps and be over 17,000 square feet.
Work on the station has already begun and it’s expected to open next year. The chain has not shared whether it will offer an attached convenience store or have anything besides gas for sale.
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Costco recently extended hours at its over 700 U.S. gas stations.
Plans for the station which have been filed with the city make it seem like the location will be a pure gas station not selling anything else.
The Costco gas station will only have six parking spaces and the plans do not show a public bathroom.
Gas has become important for Costco
Costco CEO Ron Vachris spoke glowingly of Costco’s gas business during its third-quarter earnings call.
“We continue to increase the overall value of our membership, including extended gas station opening hours and lowering prices on some key items such as eggs, butter and olive oil. The combination of expanded gas station hours, new gas station openings and lower prices at the pump have led us to having two of our all-time highest gallon weeks in the U.S. during the last month,” he shared.
Vachris noted that expanding its gas station hours had a positive secondary effect on the business.
“The recent expansion of gasoline hours was a great indicator that the throughput for our members improved nicely, and we saw that immediately in gallon increases,” he added.
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Adding hours to the gas stations are part of a broader effort to get customers in and out faster.
“And on the technology front, we’ve realized with some of these pilots as we are working through these different systems to speed up the front-end experience and get that moving — flowing quickly, the backside of that is it turns over parking spaces quicker. And when you turn over parking spaces quicker, it makes the whole experience better,” he added.
