Costco wants to give its shoppers an easier way to buy gas.
The membership-warehouse chain is opening a handful of stand-alone gas stations a mile or two away from the store parking lots that usually house the stations. The first location opened in Southern California last month, and a second is planned for Honolulu.
The locations are part of Costco's effort to find new ways to increase sales and make its membership more valuable to shoppers, said Costco Chief Financial Officer Gary Millerchip. Members have said they want faster checkouts, larger parking lots and that gas stations can get busy, he said in an interview. In some cases, the easiest real estate solution is a gas station near, but not immediately adjacent, to stores.
"They're really intended to either alleviate some of the capacity constraints in the gas station that exists at the warehouse today or we just can't get a gas station on the same premises," Millerchip said.
Costco is moving carefully with its plans as it becomes more creative with its real-estate strategy, he said.
"It's still close enough to a warehouse that it's still providing convenience to the members of that warehouse," Millerchip said. There are a couple in the pipeline, he added.
Costco's gas sales are higher than they have ever been, executives said recently. Costco usually sells gas at a discount to the prices of its regional competitors to attract business to its stores and increase memberships, the primary driver of profit for the retailer. New stand-alone stations will have that same discounted price.
In the most recent quarter, as fuel costs rose around the country, so did Costco's gas sales by volume. Five weeks that ended in mid-May were its highest gas-sales weeks in company history, Costco Chief Executive Ron Vachris told investors on a May earnings call.
"The high consumer price sensitivity, which fueled these record volumes, also drove many members to use our gas stations for the very first time, " he said.
Shoppers who fill up at Costco generally spend more overall, Vachris added.
Costco has reported annual sales growth for nearly two decades. Investors watch membership renewal rates and sales growth closely for any sign of cooling.
Over time, it has been harder for Costco to find enough land to build new warehouses as it expands, so it has become more open to alternative real-estate ideas. One of them is a store built vertically along with a housing development, not the typical, single-level store, Millerchip said. Another is stand-alone gas stations.
Costco's Southern California stand-alone station was built at the site of a former Bed Bath & Beyond, according to local city planning documents filed to propose the redevelopment last year. The 17,000-square-foot building and pump area doesn't sell items other than fuel, according to the documents. As of Friday afternoon, regular gas at the location was sold for $4.75 a gallon, according to Costco's website. According to AAA, the average price of gas in Orange County, Calif., where the stand-alone station is located, was $5.39.
A similar location is planned for Honolulu, according to local government documents.
Last week the stock of Costco fell slightly after it reported that net sales for the five weeks ended on July 5 were up 10.6%, slightly lower than the 13.7% growth in the four weeks ended on May 31. Executives said May's results likely benefited from higher gas prices, as shoppers flocked to Costco's stores to find the best deal.
"We're seeing some members that have been members for some time that are using the gas stations for the first time," Millerchip recently told analysts. "We think that's also an encouraging sign."
Write to Sarah Nassauer at Sarah.Nassauer@wsj.com
(END) Dow Jones Newswires
July 18, 2026 12:00 ET (16:00 GMT)
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