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Gas fueling Costco growth, customer loyalty

Consumers wanting cheap gas are hitting Costco pumps and driving customer loyalty for the wholesaler.

Photo: Tom Nast - stock.adobe.com

June 9, 2026 by Judy Mottl — Editor: RetailCustomerExperience.com & DigitalSignageToday.com, Connect Media

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Consumers seeking cheap gas, in light of increasing fuel costs, are propelling Costco's growth as the wholesaler enjoyed "record-breaking" gas volume sales in its third quarter of 2026.

Every week in Costco's Q3 set successive all-time company volume sales, with the final five weeks of Q3 coming out as the top five volume weeks ever.

"Our gas team performed exceptionally well to manage this unprecedented demand, which requires multiple daily gas deliveries to many locations," Ron Vachris president, CEO and director, said during Costco's earning call on May 29.

Costco makes little money on gas sales — a few pennies a gallon, quite lower than the 25- to 35-cent markup a neighborhood gas station reaps, according to a CNN report.

But while Costco's gas markup is tiny the return is proving to be quite valuable. It's a new customer lure and gas sales are driving stronger customer loyalty.

"The high consumer price sensitivity, which fueled these record volumes, also drove many members to use our gas stations for the very first time in the third quarter. 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," said Vachris.

The current average national gas price this week is $4.322, down from $4.507 a week prior, according to Automobile Association of America. A year ago the price was $3.144.

This past Memorial Day weekend gas prices were the highest they've been in four years, according to AAA data. The national average for a gallon of regular was $4.56, $1.38 higher than this time last year.

Gas price inflation impacted Costco sales by about 2.2%, according to company leaders.

Low gas prices boosting customer loyalty

Costco's growing gas sales reflects how Costco meets consumer needs and expectations, according to Vachris.

"As events in the Middle East have had a significant impact on product supply and gas prices, our focus, as always, is to be there for our members by staying in stock and offering the best value. The result was record-breaking volumes," he said in the call with industry analysts. "Our goal is to be the first to lower prices and the last to raise them."

While Costco didn't provide specific figures, many members stopped at Costco pumps in Q3 for their first time ever.

"Generally speaking, a little less than half of our members are visiting the warehouse when they visit the gas station. I wouldn't say we've seen a dramatic change when you look at our results in the third quarter around traffic overall as a result of that," Gary Millerchip, executive VP and CFO, said in the call. "We think that's partly because a lot of members are increasing their frequency of visiting the gas station to top up in between what would have normally been a gap between getting the tank to empty because of the concern about what might the gas price be tomorrow."

The big reward for Costco is not gas sales but customer retention.

"When we look at our members that are engaged in gas with us, they are generally visiting more frequently overall. They're spending more with us overall, and they're also renewing at a higher rate," said Millerchip. "So we do think it's a good healthy barometer of long-term growth for the business as we continue to drive engagement in gas."

That gas engagement is spurring customer loyalty, according to Vachris.

"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," he said.

At the end of Q3 Costco had 41.2 million paid Executive memberships, up 9.6.% compared to a year ago, according to Millerchip.

Costco ended the quarter with 82.9 million total paid members, up 4.1% versus last year and 148.5 million cardholders, up 4% year-over-year.

Costco financials up double digits

Costco's net income for the third quarter was $2.192 billion or $4.93 per diluted share, up 15% from $1.903 billion or $4.28 per diluted share last year.

Net sales were $69.15 billion, an increase of 11.6% from $61.96 billion in Q3 2025. Digitally enabled comparable sales were up 21.5% and 20.8%.

Those double-digit growth figures come as Costco is submitting refund claims over the next few months for tariffs imposed in 2025 and 2026. It expects to start receiving funds two to three months after submittal.

Costco sued the Trump administration in December 2025 claiming President Donald Trump exceeded executive authoring in enacting tariffs and misused the International Emergency Economic Powers Act. Costco made it clear it would return tariff costs back to the consumer.

"As we've mentioned before, our plan is to return to our members, in some form, the portion of tariffs that were passed on to them. How much we return and when depends on a variety of factors, including how much refund money we receive and when it arrives as well as developments in the lawsuit filed against the company regarding the return process," said Vachris.

Warehouse operations for 2026

Costco has a target of 30-plus new openings per year going forward. In Q2 it opened four new warehouses, three in the U.S. and one Canadian business center which brought its total warehouse count to 928 worldwide. It expects 26 net new openings in its 2026 fiscal year.

Along with new warehouse openings Costco is also bullish on warehouse technology aimed at driving speedier checkout to deliver a better customer experience. The technology enhancements have included a better mobile wallet, digital membership card quick access on the its app and rolling out a shopping cart prescan tool.

On the delivery front it rolled out same-day delivery in France and Spain and same-day delivery via third-part partners is a "highly effective way to deliver more convenience," said Vachris.

Costco's same day delivery time in the U.S. is less than 45 minutes.

"This part of our business is growing at an even faster rate than our digital business overall and is a strong driver of loyalty as it is often our highest spending members who are using this service," said Vachris.

Here comes more AI

Costco is also embracing AI and learning how consumers are embracing AI in shopping habits.

While it's still "early days," for Costco and AI, the wholesaler has begun updating product pages to ensure they're "reflecting and translating those large language models so its value and quality is showing up."

Costco said that when members are searching for items, the wholesaler is showing up more consistently.

"We're now leveraging AI to enhance our product pages online, which, in turn, is increasing our relevance with the large language models. While the volume of traffic generated from AI search is still low, we saw triple-digit growth in Q3, and this activity has the highest conversion rate of all traffic coming to our site," said Millerchip.

Costco views AI as a significant opportunity.

"We're working with the leading AI companies to improve the visibility of our values to current and potential future Costco members," said Vachris. " We believe AI is changing how consumers research products and has the potential to be a significant opportunity for Costco given our pricing authority and our focus on quality.

"So we feel we're very bullish on this AI search and the strength it's going to bring to telling the whole Costco story about the true value of what we offer," he added.

About Judy Mottl

Judy Mottl is the editor of RetailCustomerExperience.com and DigitalSignageToday.com at Connect Media. She is an award-winning editor, reporter and blogger who has worked for top media for nearly four decades, including AOL, InformationWeek and Internet News, as well as for leading technology providers including HP. She’s written everything from breaking news to in-depth industry trends and reported on technology long before the internet arrived, including the debut of the first smartphone. When she's not sharing insights on digital signage deployments and trends in retail customer experience she's on the beach or watching the latest live murder trial.

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