Costco has debuted its first standalone, members-only fuel station in Mission Viejo, California, on June 24th, marking a significant departure from its traditional warehouse-and-gas model. This new facility features 40 fueling positions and is designed to alleviate congestion at existing Costco warehouses where gas pumps are often located. A second standalone gas station is already under development in Honolulu, Hawaii, slated to open in 2027, with demolition beginning in October 2025.
This strategy allows Costco to test standalone fuel-only concepts in high-cost or dense markets where building a full warehouse is impractical. The gas-only stations offer no warehouse, convenience store, or food court, focusing solely on fuel sales to members. This approach allows Costco to maintain its aggressive fuel pricing, which can be $0.10 to $0.30 below the U.S. average, according to U.S. News and World Report, and up to $0.71 below the Orange County average, as seen at the Mission Viejo station selling regular gasoline for $4.59 per gallon.
Costco's fuel business is a key driver of customer loyalty and profitability. Gas operations contribute about 10% of the company's net revenue, and roughly 70% of Costco's profits come from membership fees. The company's lower gas prices are a major draw for members, with some analysts estimating that members can save about $77 annually on fuel by using Costco. This makes the $65 or $130 annual membership fee a compelling value, especially as rising gas prices tend to make Costco's value proposition even more attractive to drivers, strengthening loyalty across its broader operations.
