Will Rising Gas Prices Send Costco's Stock Higher?

By Leo Sun – Mar 26, 2026 at 12:44PM ESTKey PointsHigher gas prices will drive more customers to refuel at Costco.That pressure will also drive them to buy cheaper bulk products at its stores.As the Iran War drives up gas prices, many retail stocks are retreating amid investor concerns about softer consumer spending. However, one retail stock that could actually benefit from higher gas prices is Costco (COST +0.84%), the world's largest warehouse club retailer. Why would lower gas prices boost Costco's sales? Costco's member-only gas stations sell fuel at lower prices than local averages, often with discounts of $0.20 per gallon or more. As national gas prices rise, more drivers will likely flock to its gas stations and visit its warehouse stores. Image source: Getty Images. Higher gas prices will also drive shoppers to tighten their budgets, and Costco attracts budget-conscious consumers with its lower prices for bulk products. Therefore, its sales of essential products should rise as other retailers struggle to sell discretionary products. Costco also offers other ancillary services -- including vision, insurance, and travel bundles -- at lower rates to increase the stickiness of its membership plans. If the Iran War drags on, Costco could attract more new members with its low gas prices and discounted goods and services. Higher gas prices will drive up Costco's transportation and energy costs, but it can offset those costs by continually adding more cardholders, maintaining high renewal rates, and opening more warehouses. It can also pass on some of those expenses to its customers. ExpandNASDAQ: COSTCostco WholesaleToday's Change(0.84%) $8.17Current Price$983.03Key Data PointsMarket Cap$432BDay's Range$973.37 - $987.3952wk Range$844.06 - $1067.08Volume34KAvg Vol2.2MGross Margin12.93%Dividend Yield0.53% Why could the crisis solve Costco's biggest problem? In the first half of fiscal 2026 (which started last September), Costco's adjusted net sales (excluding fuel and forex) grew 6.5% year over year, its number of warehouses increased 3% to 924 locations, and its number of cardholders rose 5% to 147.2 million. However, its global renewal rate dropped from 90.5% at the end of fiscal 2025 to 89.7% in both the first and second quarters of fiscal 2026. It mainly attributed the slowdown to lower renewal rates among its younger "digitally signed" members, who enrolled online rather than at a warehouse. To stabilize that rate, Costco has been rolling out more targeted digital communications, promotions for ancillary services, new perks, and auto-renewal features. Costco believes that as those younger members become more familiar with its additional services and perks, they'll be less likely to cancel their new memberships after a year. However, the recent surge in gas prices gives those members a very compelling reason to keep their memberships -- which could easily pay for themselves at the pump after a few months. It's even planning to open its first stand-alone gas station this June to expand beyond its warehouses. Costco's stock still looks pricey at nearly 50 times forward earnings, but it could deserve that premium this year as soaring gas prices generate strong tailwinds for its business.Read NextMar 26, 2026 •By Rick Munarriz2 No-Brainer Dividend Stocks to Buy in 2026Mar 25, 2026 •By Micah ZimmermanHere's Why Costco's Gas Pricing Strategy Is Good News for ShareholdersMar 22, 2026 •By Lawrence Rothman, CFA2 Soaring Stocks to Hold for the Next 20 YearsMar 21, 2026 •By Neil PatelIf You'd Invested $1,000 in Costco Stock 10 Years Ago, Here's How Much You'd Have TodayMar 21, 2026 •By Will HealyTariff-Related Lawsuits Could Hurt Costco Stock, but the Reason Why May Surprise YouMar 20, 2026 •By Rick Munarriz3 Recession-Proof Stocks to Buy Before the Next Market CrashAbout the AuthorLeo Sun is a contributing Motley Fool stock market analyst who has worked with the company since 2013, covering technology, consumer goods, industrial, and financial sectors. He became a self-made millionaire by age 40 through long-term investing, crediting lessons from Warren Buffett and Peter Lynch. Leo is a regular guest on CNBC Asia providing stock analysis on Chinese technology companies, including Tencent, Baidu, and Alibaba. He previously wrote for InvestorGuide and holds a bachelor’s degree in English from the University of Texas at Austin.TMFSunLionX@TMFSunLionStocks MentionedCostco WholesaleNASDAQ: COST$983.03(+0.84%)+$8.17*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.