$4-plus U.S. gasoline helped drive first-time fill-ups at Costco, but shares slid nearly 4% Friday as analysts doubted the retailer can keep those gains when fuel prices ease.
747 Costco gas stations undercut local rivals by about 30 cents a gallon, pulling in record demand and lifting warehouse foot traffic about 5% because roughly half of gas customers also shop inside.
Gasoline still squeezes profitability: Costco makes only a few cents per gallon, and gas cut last quarter's gross margin by 0.2 percentage point after adding about 0.1 point when prices were lower last year.
Executives said cheap fuel, $4.99 rotisserie chickens and extended meat-and-egg discounts are building loyalty, but investors focused on whether that momentum can outlast the current price spike.
When gas prices inevitably drop, can Costco retain the millions of new members it gained?
Are Costco's new gas-only locations a brilliant expansion or a threat to its warehouse sales strategy?