How Costco’s Gas Prices Keep Members Coming Back
TL;DR Summary
Costco undercuts local gas stations by roughly 30 cents per gallon and uses the resulting high-volume gas sales to drive store traffic and membership value. While gas is a thin-margin product, the company profits mainly from membership fees, with gas helping boost overall warehouse purchases. When gas prices rise, Costco often gains from volume and loyalty; when prices fall, margins tighten but the churn and foot traffic can still support long‑term growth.
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