The Gas Station Is a TurnstileNarrow moat

Costco operated 747 gas stations at the end of fiscal 2025 and gasoline was approximately 10% of total net sales — around $27 billion¹. It is the company's single largest ancillary business and among its least profitable by design.

Costco tells investors exactly how to read it: the gasoline business "generally has a lower gross margin percentage and lower SG&A expense relative to our non-gasoline businesses," and "a higher penetration of gasoline sales will generally lower our gross margin percentage"². This is why every gross-margin discussion in the filings is given twice, with and without the effect of fuel prices — the headline number is contaminated by a business that is deliberately run at close to no margin.

What it buys is arrival. Fuel is bought roughly weekly by an American household; groceries perhaps as often; a television once a decade. A forecourt in the car park converts the least frequent visit pattern in retail into one of the most frequent, and the queue is composed exclusively of people who have already paid the annual fee.

The volume evidence is that it works and that it is elastic. Gasoline volume rose approximately 2% in fiscal 2025 and approximately 10% in the third quarter of fiscal 2026³, the latter alongside a 20% rise in the average price per gallon — Costco takes share when fuel is expensive, because that is when the saving is worth the detour.

Count gallons rather than dollars, and Costco gives it as a volume change each quarter. Volume growth ahead of the market means the turnstile is turning. Revenue growth driven by price tells you nothing about the membership at all, which is why the fiscal 2026 comparable-sales figures need reading twice.