Costco sees record gas demand as cheap gasoline draws shoppers

Costco reported unprecedented demand for gasoline during its latest earnings call, with many stations forced to summon tanker trucks multiple times a day to avoid running out. Prices above $4 per gallon nationally and over $6 on the West Coast have made Costco a major destination for low‑priced fuel, typically undercutting local stations by about 30 cents a gallon.

The retailer earns only a few cents per gallon, far less than the typical 25‑35‑cent margin at independent stations, but offsets lower fuel margins with strong membership revenue, which accounts for roughly two‑thirds of overall profit. In the last year Costco operated 747 gas stations, contributing about 10% of total sales. The surge in fuel traffic boosted store footfall by roughly 5%, leading many customers to purchase additional items, especially in the back‑of‑warehouse sections where rotisserie chickens and other discounted goods are displayed.

CEO Roland Vachris noted that the high gas demand could enhance member loyalty, while CFO Gary Miller highlighted the impact of fuel price swings on overall margins: low gas prices added about a tenth of a percentage point to gross margin, whereas higher prices subtracted two‑tenths. Costco plans to extend discounts on meat and eggs to further increase value for its members.