Shares in Costco (COST) edged lower early Monday despite reports that the wholesale retailer plans to build several standalone gas stations, including one in Honolulu. Costco first launched the new format last month in Mission Viejo, a commuter city in Southern California. The retailer is looking to boost sales while improving convenience for its shoppers.

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Costco Tries New Format

Costco earns traffic boosts to its warehouses by selling fuel at lower prices at its gas stations. These stations are located adjacent to the warehouses.

This year, shoppers piled into its gas stations in search of cheaper fuel as the Middle East conflict drove up energy prices. These have helped Costco to continue to deliver sales growth in recent months.

However, Gary Millerchip, Costco's chief financial officer, told The Wall Street Journal in an interview that the move also aims to address shoppers' concerns. According to Millerchip, the retailer's gas stations can quickly become crowded. Shoppers want to check out faster and have more parking space.

However, Millerchip pointed out that the new stores are being built very close to its warehouses. This is so that the buying experience remains convenient for its shoppers.

Analysts Weigh In on Costco's Gas Business

Meanwhile, Costco's shares recently underperformed the benchmark S&P 500 (SPX). According to Guggenheim analyst John Heinbockel, this odd trend has more to do with improving energy-price-driven economic environment.

Similarly, Wolfe Research analyst Spencer Hanus has said that he expects an impact on Costco's performance in the second half of this year as gas prices drop.

Notably, Mizuho analyst David Bellinger recently pointed out that Costco is selling a lot of gas. However, Bellinger warned that gas is a low-margin business for Costco. As a result, this could slightly impact the retailer's overall merchandise gross profit.

Is Costco a Good Stock to Buy Now?

Across Wall Street, Costco's shares continue to carry a Moderate Buy consensus rating from analysts. This is based on 13 Buys, eight Holds, and one Sell issued by 22 analysts over the past three months.

However, the average COST price target of $1,095.36 implies about 16% upside (see COST stock forecast here).