Costco's Gas Stations See Record Demand as Fuel Prices Surge

U.S. gasoline prices have risen above $4 per gallon nationwide and $6 on the West Coast, driving a surge to Costco’s 747 stations. Long lines have required daily tanker deliveries, and about half of drivers who fill up also shop inside, raising foot traffic by roughly 5%.

CNN

Costco undercuts independent stations by 30 cents per gallon, using a membership model that provides roughly two-thirds of profit. Gas sells at a thin margin of a few cents per gallon, far below the 25- to 35-cent markup, mirroring its $4.99 rotisserie chicken approach to pull shoppers deeper into the warehouse.

CNN

Higher fuel prices cut gas sales by $2.3 billion in 2025 versus 2024 and shaved 0.2 percentage points off the quarter’s gross margin. U.S. sales rose 9.4%, beating a 7% forecast. Revenue reached $70.53 billion (up 12%), net income $2.19 billion (up 15%), and EPS $4.93. Gas accounts for about 10% of sales. Shares slipped nearly 4% after the earnings release, though the stock is up about 15% YTD, outpacing the S&P 500 Consumer Staples index’s 8% gain.

CNN

CEO Ron Vachris told analysts the price spike “drove many Costco members to use its gas stations for the first time,” noting that foot traffic “typically translates into higher spend in the warehouse.” CFO Gary Millerchip said Costco “widened our gaps in terms of price” to address fuel-cost concerns and highlighted an “investment in everyday-low-price positioning during a period of macroeconomic uncertainty.”

USA Today

Analysts warn margin boost may be temporary. Zacks strategist Bryan Hayes cautioned that “the gross margin line could face modest near-term pressure as the company prioritizes member loyalty over rate.” The stock’s 4% dip reflected that skepticism.

USA Today

The coverage lists the chief executive as “Roland Vachris” (CNN) and “Ron Vachris” (USA Today), creating an unresolved name discrepancy. Counts of first-time gas customers were not disclosed.

USA Today

• “We believe this will drive even greater loyalty with these members in the future as members who use our gas stations typically spend more with us in the warehouse,” — Gary Millerchip, CFO

CNN

• “Over time, it’s a great way to build loyalty,” — Gary Millerchip, CFO

CNN

• “We do think it’s a good, healthy barometer of long-term growth for the business.” — Gary Millerchip, CFO

CNN

• “That investment in everyday-low-price positioning during a period of macroeconomic uncertainty is classic Costco,” — Bryan Hayes, Zacks Investment Research

USA Today

Costco plans to keep its low-price fuel offering while watching oil-price trends that could affect margins. It highlighted rapid-delivery investments targeting sub-45-minute same-day service and expects upcoming tariff refunds to be passed on to consumers.

USA Today