The news: Costco is benefiting from elevated gas prices. As prices climb, consumers are increasingly willing to drive farther and wait longer for cheaper fuel.

• Costco’s gas stations sold record volumes last quarter, with each four-week period setting a new all-time high.
• That surge was so strong that many locations required multiple fuel deliveries per day.

Why it matters: Low-cost gas is a textbook example of how Costco’s value proposition works.

It draws consumers to its clubs, helps attract new members, and encourages existing members to visit more often. In fact, many members used Costco gas for the first time last quarter.

Those visits don’t stop at the pump. Members who fill up tend to shop more, contributing to a 2.4% increase in global traffic.

Once inside, Costco’s merchandising, with on-trend items like protein snacks and bars, drives impulse purchases. Nonfood comps rose in the high-single digits, with strong gains across categories like jewelry, small appliances, home furnishings, and health and beauty.

That flywheel helped Costco grow revenues 11.6%, while US comp sales (excluding fuel) rose 6.8%.

Implications for retailers: Gas is one of the most visible prices in the economy, which makes Costco’s fuel stations powerful billboards for its broader value proposition.

That perception carries into the store, where Costco says its Kirkland private label offers at least 15% to 20% savings versus national brands at comparable or better quality.

In an environment where consumers feel squeezed, Costco’s combination of value and quality should help it weather the storm.

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