By Ethan Forman
DANVERS — Costco Wholesale wants its North Shore members to be able to fill up their gas tanks after filling up their shopping carts.
And it's not the only one.
Stop & Shop recently got the green light from the Peabody City Council to sell gas at its supermarket on Howley Street, on the Peabody/Salem line. Stop & Shop will not limit sales to members, but offer discounts to those using its Stop & Shop cards or who purchase a certain amount of groceries.
These are the first local businesses to latch onto a nationwide trend in which large retailers are offering gas along with other services. Costco says in a town filing it wants to be able to compete with other large retailers that offer gas. An attorney for Stop & Shop made a similar argument before the Peabody City Council, saying gas pumps would help the grocer remain competitive with the likes of Walmart and other big chain stores.
Stop & Shop already has pumps at 57 locations in five states.
Costco is scheduled to go before the Zoning Board of Appeals for variances to install a gas station in a little-used parking lot along Route 1 north, next to the Hardcover Restaurant. The current zoning prohibits gas stations.
"At a time when economic pressures are causing many retailers to struggle," attorney Michael Giamo wrote in an application for the permit, "the ability to develop new revenue sources for its existing retail location is important to the economic vitality of Costco, which is a significant local employer and taxpayer in Danvers."
Costco pays $191,000 in taxes annually to Danvers, Town Clerk Joseph Collins said.
"The inability to offer gasoline sales to customers of its Danvers store as it does at other Costco locations results in a hardship to Costco," the application says.
Giamo declined further comment, and a representative for Costco could not be reached for comment.
"I think it's just there are Stop & Shops, B.J.'s and Costcos that have had gas for some time," said Bill Rennie, vice president of the Retailers Association of Massachusetts.
"It may be the permitting process just to update the store," he said, that has led to the delay of the pumps being installed on the North Shore. Convenience stores like Cumberland Farms have long sold gas to attract customers, he noted, and the push by larger retailers is to provide a similar convenience.
"The whole one-stop shopping experience, to be able to go to one place and fill up your tank while you are there, is appealing to consumers," Rennie said. "Everybody needs to fill up their tank to get anywhere."
Rennie said large retailers are tapping into consumers' concerns about gas prices, which were more than $4 a gallon last summer but have been creeping up in recent weeks and approached $2.70 a gallon locally.
"It's a very competitive market," Rennie said, "with all the attention that has been paid to gasoline prices in the past few years, the consumer is looking to save money wherever they can."
Whether the big chain stores will squeeze out local gas stations remains to be seen.
"What the consumer can support will determine if we have enough supply out there," Rennie said. "Retail is certainly a competitive environment."
The Costco Gas facility would consist of three pumping islands, three underground storage tanks, an overhead canopy and an attendant kiosk. There would be no vehicle service or sales of other items.
A hearing has been scheduled for July 13.
Staff Writer Ethan Forman can be reached at 978-338-2673, or by e-mail at eforman@salemnews.com.
