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    BJ's Fuels Loyalty

    Gas station program seeing increased membership and sales.

    NATICK, Mass. -- BJ's Wholesale Club Inc., which in the past two years has embarked on an aggressive campaign to erect gas stations at facilities, said its fuel program continues to buoy new memberships and bolster loyalty among its patronage.

    In a telephone conference with Wall Street analysts yesterday, CEO and President Jack Nugent and CFO Frank Forward praised the petroleum program, which has increased to 57 stations and is expected to reach more than 70 locations by year end.

    "We build an ROI (return on investment) that is based on gas stations not being profitable and built in the ROI is a ratio of incremental sales and incremental membership," said Nugent. "Every time we open up a gas station we look back at its performance and its changed membership. It proves the ROI makes sense."

    Nugent, who added that BJ's looks to retail gasoline at 6 to 8 cents below street price, added: "We've never divulged exact numbers, but we have consistently had improvement in membership and rub off sales that make for a very good ROI."

    The report came as BJ's revealed a solid fiscal first quarter, with net income rising slightly, from $23 million a year ago to $23.1 million. Total revenue climbed 11 percent to $1.29 billion from $1.16 billion, with a same-store sales lift of 4 percent.

    The warehouse membership chain, with 134 locations predominantly in the East Coast, also said it was expanding test markets for self-checkouts and a prescription drug program. The company most recently opened three outlets in the Greater Atlanta market and plans to open new stores in existing BJ's markets.

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