Costco Wholesale Inc. will begin selling gasoline in Utah for the first time at its warehouse at 1818 S. 300 West.
Gasoline pumps and a station are under construction at the warehouse, and the result will be a facility that can handle 12 cars at a time. It is tentatively scheduled to open the second week of August."It's an expansion plan that's taking place across the country," said Paul Latham, the company's vice president. "Wherever it makes sense financially and where we have space for it, we're doing it."
Costco has been selling gas in other states since 1995, and typically its gas is considerably cheaper than traditional stations -- sometimes 10-15 cents per gallon less. That leads to large sales volumes.
"It's not unusual to get 2,000 transactions in a day," Latham said.
He said gas prices may be lower than average at the new Utah station, but he cautioned that prices depend on the ever-fluctuating fuel market.
"The market conditions today are very, very tight," Latham said. "The spread where we are and where the competition is is pretty lean right now. But we work on razor-thin margins, and that makes us able to make a little bit of margin on lots of volume."
In addition to sales volume, he said, Costco has saved money by using a station design that allows customers to get in and out quickly.
The stations have passing lanes, so if a customer is stuck behind someone else and a spot opens up in front of that car, the customer can move ahead and start pumping gas.
Also, the pump hoses are long enough so people can gas up from the opposite side of the pump if need be.
Customers must input their Costco membership card number and then pay with a credit or debit card.
The station could function without attendants, but Latham said attendants are useful in helping customers get accustomed to the slightly different approach used by Costco stations.
The company currently is reviewing all its 220 stores to see which ones can accommodate gas sales. In some places, land-use restrictions or lack of space prevent installing the stations. Latham predicts that about two-thirds of Costco's warehouses eventually will be in the gasoline business.
Costco has two other warehouses in Utah -- one in Midvale and another that will open in Orem this year.
Albertson's Food and Drug Centers announced in April that it will begin installing gas pumps at five of its Utah grocery stores and already has them at stores in other states. However, Latham said this has nothing to do with Costco's decision.
Costco, which merged with its rival, Price Club, in 1993, is a warehouse operation that sells a wide variety of items including milk, jewelry and tires to customers who buy membership cards.