(NEXSTAR) — As your gas tank approaches emptiness, you might choose a gas station where you can use rewards, or perhaps one that offers better incentives. the best snacks . Perhaps, you're heading to your closest Costco and Sam’s Club for the slightly cheaper prices at the pump.
Yet, how do those warehouses manage to maintain such significantly lower prices compared to your usual go-to places for fuel?
It’s mainly due to them "accepting lower profit margins" to attract customers into their stores, according to Patrick De Haan, the lead petroleum analyst at GasBuddy, who recently shared this insight with Nexstar.
Basically, he said, Costco and Sam’s Club employ "gasoline as the draw to bring people" to their warehouse stores.
They aim to lure you into the store since frequently when you're refueling at Costco, you think, 'I may as well head inside too; I do need some additional stuff.' Once inside, shoppers tend to spend extra money on products with higher profit margins.
De Haan went on to say that the retailers aren't experiencing any financial loss from selling gas.
Costco’s beloved hot dog combo operates in much the same way. Ever since the introduction of the hot dog and soda combo meal in the mid-1980s, it has kept its $1.50 price point. Provided that customers continue to visit our warehouses and purchase other high-ticket items, the appeal of the hot dog and fountain soda It's a valuable promotion for Costco. Similarly, this applies to its rotisserie chicken .
The amount of gasoline that Costco and Sam’s Club warehouse stores buy also assists in offset the costs, oil industry consultant Andrew Lipow previously told Nexstar’s NewsNation.
De Haan previously told Consumer Reports that gas at warehouse stations is typically anywhere between 5 cents and 25 cents cheaper per gallon than at other nearby gas stations.
"And when prices go up, they keep their prices lower for a longer time," he said additionally.
Although the costs might be quite comparable between these two firms, The kind of gas differs. .
Both provide unleaded, premium, and diesel fuels (here’s how to know which you should be getting ) Only Costco provides Top Tier fuel.
The fuel, according to Top Tier , is intended to keep engines cleaner by reducing deposit buildup on injectors and intake valves. A 2016 study by AAA found that Top Tier gasoline keeps engines 19 times cleaner.
“Yes, Top Tier gas is worth the extra money,” CarFax reported The advantages are real.
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