Jun 1, 2026
Costco is hitting its stride. The subscription-based warehouse retailer broke records in Q3. CEO Ron Vachris pointed to the Middle East war lifting fuel prices, which led to record-breaking gas sales at Costco pumps.
Many fuel buyers were first-timers, Vachris has said. After all, gas is hitting Americans where it hurts: in the wallet. Regular gas hit about $4.48 a gallon in late-May, up roughly $1.32 in a year and reversing three years of declines.
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Buyers aren’t happy. A University of Michigan survey puts consumer confidence at record lows.
Do rising prices make a paid membership more worth it than ever — at Costco, or anywhere?
Gas prices draw members in
Gas prices have proven to be good for Costco’s business. The retailer’s reported revenue grew 12%, in part because gas buyers were ducking into Costco’s warehouses.
How much did Costco members benefit?
Savings at the pump are real. U.S. News estimates you save 10 to 30 cents per gallon at Costco pumps compared to local stations. That’s a difference big enough to catch the eye of drivers sweating for a deal.
One expert seems to think Costco’s prices hold up. Patrick De Haan, GasBuddy’s Head of Petroleum Analysis, told the San Francisco Chronicle that “Costco tends to be one of the most aggressive competitors when it comes to prices.”
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Doug Johnson, an AAA spokesman, added that Costco is able to offer lower prices by taking a lower price margin than competitors: 14%. That’s significantly less than the industry-standard of 20%.
That said, the math doesn’t always pencil out. De Haan said long wait times and longer drives can cancel out Costco savings. And that’s not accounting for the price of entry; for the privilege of waiting in line, you need to purchase the Costco membership.
How much fuel saves you money? An analysis by Kiplinger estimates a Costco Gold member must fuel 260 to 1,300 gallons per year to break even with the $65 membership. The math is similar for Sam’s Club and BJ’s, two warehouse clubs that offer members discounts at the pump.
But Costco members don’t just pump gas. In fact, Vachris has said that customers who pump gas at Costco tend to spend more inside the store.
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When a membership pays for itself
How do savings hold up when Costco members enter the warehouses?
Costco’s members-only prices are very competitive with grocery stores. A study by Consumers’ Checkbook found that items sold by Costco were 8% cheaper than Walmart and 13% cheaper than Target. BJ’s was priced even better, with items priced 15% cheaper than Walmart’s, though customers said Costco’s items were higher-quality.
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There are caveats. Members must spend enough to recoup the cost of an annual Costco membership. Infrequent shoppers might actually lose money — because they buy in bulk.
Spoilage is an issue, too. Consumers’ Checkbook warns that if half of what you bulk-buy spoils, your savings diminish further. Food waste is a bigger cost than you might expect. The U.S. Environmental Protection Agency (EPA) estimates 11% of what you buy is wasted, costing a family of four about $2,913 a year.
It’s also worth noting that the membership model is created to make members spend more, and it’s working broadly. One McKinsey study found that top-performing loyalty programs boosted revenue from reward-redeeming members by 15 to 25%.
Club warehouses, in particular, are booming. The Acosta Group found that 21% of members shopped more in 2025 compared to the year prior, led by millennials.
The real test may be whether you’re spending on things you’d buy anyway. If your discount lands on items you’re only buying because “Hey, it’s Costco,” you might not be saving after all.
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Cole Tretheway has been covering money for four years. He started as an intern at The Motley Fool Money, covering best-of credit cards, savings accounts, and financial products. He's since expanded into wholistic personal finances, including the psychology of money.
