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Costco's pumping gas Photo by Bob Pennell Ray Beckett of Spokane, Wash., walks across the nearly completed gasoline islands at Costco Wholesale on Highway 62. Beckett works for IPE Inc., which is the general contractor for the new service station. Discount store vows lower fuel prices at new filling station By DAVID PRESZLER Penny-pinching motorists may soon get a little relief at the pump -- if they show their membership cards. Costco Wholesale, which has built its business trading tighter profit margins for greater volume, is getting into the Rogue Valley's gas game. Construction is nearly complete on the gas station being added at the discount warehouse's Medford store in the Crater Lake Plaza off Highway 62. The station should open in the middle of next week, according to Costco store manager Wayne Harris. The prices will be lower than elsewhere in the valley, Harris promises, though he declined to say precisely how much lower. "We'll definitely be showing a substantial savings," he says. But bargain hunters had best bring their membership cards and leave their cash and checks at home, because only Costco members can purchase gas, and for security reasons the station will accept only debit cards and major credit cards. The station will feature attendants to pump the gas -- required by state law -- but won't provide services such as washing windows or checking oil. Costco began featuring gas stations at some locations a few years ago and is currently adding them to stores nationwide. The Medford station will be the company's second in Oregon, joining one built this year in Warrenton, near Astoria. Harris says the expansion into gas sales is just another way the company is adding value to its memberships. Costco's membership has risen steadily since the Medford store opened in 1991. Harris says it's grown at least 10 percent each year and the company expects the gas station's opening to fuel a rush of new memberships, pushing this year's growth to 28 percent. "We've seen it everywhere we've opened a gas station," Harris says. "At 5-10 cents cheaper, it doesn't take long to pay for a $40 membership." The idea is that the discount gas will be enough to encourage those who've considered a membership into taking the plunge. The discount gas has proven popular elsewhere. Harris says the Warrenton station does $120,000-$125,000 in sales a week. "And that's a small town," he says. "Ours is projected to do much more than that." Harris says the opening of the station will be good for motorists throughout the valley because it will put pressure on other stations to keep their prices low. "They are certainly going to want to close the gap," he says. The gas station is only one of the recent changes at Costco. The company added about 17,000 square feet to the main store earlier this year. It moved the food court inside the main building and is finishing a reorganization. It is also expanding its tire center into the space formerly occupied by the outdoor food court. Though the construction has hampered parking at the store temporarily, Harris says he doesn't expect that to be a problem when the work is finished -- even though traffic to the gas station will be routed through the parking lot. "Even with the gas station, we'll have around 800 parking spaces -- which is more than enough," he says. The expansion into new areas like gasoline sales does present a question for Costco, which caters heavily to small businesses. As it grows into new areas, doesn't it risk competing with its members' businesses? "That's something we think about," Harris admits. "But the reality is that we need to be true to our members across the board.'' He says that while the company is adding new products at low prices, it doesn't attempt to match the selection that more specialized businesses can offer. And he says a rapidly growing area such as the Rogue Valley can handle the additional competition. "There's room for everybody." Today's Business Index Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA