Publication date:
June 16, 2025
Costco Plans Stand-Alone Gas Station to Test Member Demand
Costco is building a 40-bay gas station separate from its warehouses to evaluate consumer interest and potentially alleviate traffic at busier locations.
Energy
Costco is set to launch a new initiative in the fuel retail sector by constructing a stand-alone gas station in Mission Viejo, California. This 40-bay facility, planned for the site of a former Bed Bath & Beyond store, will be located approximately two miles from the nearest Costco warehouse. The project represents a strategic shift for the company, which typically situates its gas stations within close proximity to or on the same property as its warehouse stores.
The decision to test a stand-alone gas station model comes after Costco's successful extension of operating hours at several of its existing gas stations, which resulted in a notable increase in sales. This move is seen as an attempt to provide greater flexibility to Costco members who may prefer fueling options that don't require a visit to the warehouse.
According to documents filed with the city planning office, the new fuel center is expected to attract significant business, with projections of up to nine fuel truck deliveries daily and over 9,500 vehicles refueling between 5 a.m. and 10 p.m. The station is slated to open in spring 2026, marking a potential new direction in Costco's fuel retail strategy.
Fuel sales are a crucial component of Costco's business model, accounting for nearly one-eighth of the company's total revenue last year - approximately $30 billion. The company's approach to fuel pricing, which aims to undercut local competition, combined with additional rewards for Costco credit cardholders, has made its gas stations a popular benefit among members.
This stand-alone gas station concept could serve multiple purposes for Costco. It may help alleviate congestion at busier warehouse locations, particularly benefiting members who only wish to purchase fuel. Additionally, it allows the company to expand its presence in areas with a high density of existing memberships without the need for full-scale warehouse development.
The initiative aligns with CEO Ron Vachris's stated goal of finding strategic ways to redistribute traffic from overly busy warehouses. It also represents Costco's ongoing efforts to enhance member benefits and maintain customer loyalty in an increasingly competitive retail landscape.
As Costco ventures into this new territory of stand-alone fuel centers, the industry will be watching closely to see if this model proves successful and whether it could lead to a broader rollout of similar facilities in other locations with high membership concentrations.
The decision to test a stand-alone gas station model comes after Costco's successful extension of operating hours at several of its existing gas stations, which resulted in a notable increase in sales. This move is seen as an attempt to provide greater flexibility to Costco members who may prefer fueling options that don't require a visit to the warehouse.
According to documents filed with the city planning office, the new fuel center is expected to attract significant business, with projections of up to nine fuel truck deliveries daily and over 9,500 vehicles refueling between 5 a.m. and 10 p.m. The station is slated to open in spring 2026, marking a potential new direction in Costco's fuel retail strategy.
Fuel sales are a crucial component of Costco's business model, accounting for nearly one-eighth of the company's total revenue last year - approximately $30 billion. The company's approach to fuel pricing, which aims to undercut local competition, combined with additional rewards for Costco credit cardholders, has made its gas stations a popular benefit among members.
This stand-alone gas station concept could serve multiple purposes for Costco. It may help alleviate congestion at busier warehouse locations, particularly benefiting members who only wish to purchase fuel. Additionally, it allows the company to expand its presence in areas with a high density of existing memberships without the need for full-scale warehouse development.
The initiative aligns with CEO Ron Vachris's stated goal of finding strategic ways to redistribute traffic from overly busy warehouses. It also represents Costco's ongoing efforts to enhance member benefits and maintain customer loyalty in an increasingly competitive retail landscape.
As Costco ventures into this new territory of stand-alone fuel centers, the industry will be watching closely to see if this model proves successful and whether it could lead to a broader rollout of similar facilities in other locations with high membership concentrations.
