In a year where most retailers were navigating choppy economic waters, Costco Wholesale Corporation (NASDAQ: COST) found an unexpected ally at the pump. The company’s gasoline business, often overlooked in its sprawling warehouse empire, surged to record heights in 2026, contributing $32.7 billion to its top line. But this wasn’t just a lucky break—Costco’s fuel strategy is a masterclass in leveraging scale, efficiency, and member loyalty. Let’s dive into the numbers and the mechanics behind this unorthodox success story.
The Gasoline Goldmine
Costco’s gasoline business isn’t just a side hustle—it’s a cornerstone of its financial strategy. In 2026, higher gasoline prices added a staggering $3.5 billion to net sales, a 12% increase in average price per gallon. But it wasn’t just price doing the heavy lifting; the volume of gasoline sold also rose by 7%, contributing an additional $1.9 billion. This dual boost propelled gasoline sales to 11% of Costco’s total revenue, up from 10% in 2025 [1].
The company’s ability to capitalize on gasoline sales stems from its unique business model. Costco operates its pumps as a loss leader, offering fuel at prices significantly lower than competitors. This strategy drives traffic to its warehouses, where members are likely to pick up groceries, electronics, and other high-margin items. It’s a classic Costco move: sacrificing margin in one area to bolster sales across the board.
Membership Magic
Costco’s membership model continues to be its secret sauce. In 2026, membership fees grew by 11% to $5.9 billion, driven by new member sign-ups, fee increases, and upgrades to Executive memberships. The renewal rate in the U.S. and Canada hit 92.3%, while worldwide it stood at 89.8%. This loyalty isn’t just good for the bottom line—it’s a testament to Costco’s ability to deliver value consistently [2].
Executive members, who pay an additional annual fee for 2% cashback on qualified purchases, accounted for 75.2% of worldwide net sales. These members are Costco’s most valuable customers, and the company’s gasoline strategy plays a key role in keeping them engaged. After all, who wouldn’t want to save on gas while earning cashback?
Warehouse Expansion and Efficiency
Costco opened 28 new warehouses in 2026, including three relocations, bringing its total to 939 locations worldwide. This expansion contributed to a 10% increase in net sales, with comparable sales rising by 8%. Digitally-enabled sales, a growing focus for the company, surged by 21%, reflecting Costco’s efforts to blend its brick-and-mortar dominance with e-commerce [3].
The company’s operational efficiency remains a key differentiator. Costco’s gross margin percentage dipped slightly to 11.09%, but excluding the impact of gasoline price inflation, it actually increased by 10 basis points. This ability to maintain profitability while expanding its footprint is a hallmark of Costco’s disciplined approach to growth.
Tariff Troubles and Triumphs
Costco faced headwinds from tariffs imposed under the International Emergency Economic Powers Act (IEEPA) in 2025. However, a favorable Supreme Court ruling in 2026 led to refunds totaling $184 million, with an additional $155 million received after the fiscal year ended. These refunds were reinvested in price reductions for members, further solidifying Costco’s reputation as a consumer champion [4].
The tariff saga underscores Costco’s resilience in navigating regulatory challenges. By passing savings directly to members, the company not only mitigated the impact of tariffs but also reinforced its value proposition.