Cost-U-Less Consolidates Fiji Store Operations.

Business Editors

PRESTON, Wash.--(BUSINESS WIRE)--Jan. 18, 2001

Cost-U-Less, Inc. (the "Company") (Nasdaq:CULS) today reported that it will be consolidating its Fiji operations from two stores into one.

The Company currently operates one store in the resort location of Nadi on the western side of the main island, and one on the south-eastern side of the main island in the city of Suva, which is the capital of Fiji and the primary population center. The Company will close the store in Nadi and serve Fiji from its store in Suva.

"The unfortunate political turmoil in Fiji has had a devastating effect on the tourist industry," said J. Jeffrey Meder, the Company's President and CEO. "The resulting economic downturn has severely impacted the Nadi store, and the prospects for a meaningful turnaround in the foreseeable future are uncertain."

"This consolidation reflects our previously stated strategy of evaluating all of our locations in an effort to improve future profitability and cash flow," added Meder. "We will take a store closure charge in the fourth quarter ended December 31, 2000 for the closing of the Nadi store."

In related news, Meder reported, "our exit from New Zealand is progressing and we are pleased to report that we have settled with a landlord on one of the two building leases we had outstanding. Due to a favorable settlement, we will have a recovery in the fourth quarter ended December 31, 2000. We believe we are adequately reserved for remaining issues in New Zealand."

The net impact of the two events above will largely offset and is not expected to have a material impact on the fourth quarter 2000 results that will be released February 28, 2001.

Cost-U-Less currently operates twelve stores in the Caribbean and Pacific region: U.S. Virgin Islands (2), Netherlands Antilles (2), Hawaiian Islands (2), California (1), Guam (2), American Samoa (1), and Republic of Fiji (2). The Company builds its business through delivering high-quality U.S. and local goods, progressive merchandising practices, sophisticated distribution capabilities, and superior customer service, primarily to island markets. For the third quarter ending September 24, 2000 the Company reported net income of $0.4 million, or $0.11 per average fully diluted share outstanding compared to net income of $0.3 million, or $.09 per average fully diluted share outstanding for the third quarter ending September 26, 1999. Additional information about Cost-U-Less is available at www.costuless.com

This press release contains statements that are forward-looking. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations that are subject to risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. These factors include, without limitation; future market opportunities for existing and planned products and services; the mix of geographic and product revenues; relationships with third parties; international operational risks; litigation; business and economic conditions and growth in various geographic regions; pricing pressures; political and regulatory instability in various geographic regions; and other risks and uncertainties detailed in the Company's filings with the SEC.