economy
How investors could benefit from Costco building its first standalone gas station
The added convenience and visible gas savings could "attract new members" to Costco and retain the ones it has, Jim Cramer says.
TL;DR
- Costco is building standalone, members-only gas stations in California and Hawaii.
- The initiative aims to drive membership growth, which has shown signs of slowing.
- Analysts suggest convenience and gas savings could attract new members and retain existing ones.
- Gas is a low-margin business for Costco, primarily used to demonstrate value and drive loyalty.
- The company is testing whether standalone gas locations can increase visits, especially from non-warehouse shoppers.
- Gas stations currently account for about 10% of net sales, with prices typically 20-30 cents cheaper per gallon than the national average.
- Membership growth is crucial, contributing 60-70% of Costco's operating profits.