BJ's Wholesale Club Explains Gas Strategy

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BJ's Wholesale Club Explains Gas Strategy

NATICK, Mass - BJ's plans to price its gasoline 6 to 8 cents below street price at its 67 East Coast warehouse clubs with fueling centers, CEO John Nugent and Chairman Herbert Zarkin told CSNews.

The company last year opened 25 gas stations and will open at least 10 this year.

"We didn't set [gasoline] in place to make money, but we didn't do it to lose money, either," said Zarkin. "We put it out there to build membership and [in-store sales] rub-off."

"The value of savings is huge for our members," he said. "It's an integral part of our marketing."

Zarkin said that internal efficiencies allow the company to charge at cost or one cent over for gasoline, and that he doubted that most supermarket chains could manage the category in a similar fashion. The company is dispensing roughly 300,000 to 600,000 gallons per month per location.

"We try to get a little margin . . . but sometimes we sell slightly below cost," said Nugent. "It depends on the market and the day."