Costco is shattering its business model in 2026 with its first-ever standalone gas station, opening this spring in Mission Viejo, California.
The 40-pump facility—located two miles from the nearest warehouse—will require membership verification at the pump, marking an unprecedented expansion beyond Costco’s traditional warehouse-anchored fuel operations that have defined the chain since 1976.
Seven Revolutionary Changes Transform Shopping Experience
Costco is implementing seven major operational changes throughout 2026 that will fundamentally reshape how members shop, pay, and access services.
These initiatives span physical expansion, technology adoption, membership enforcement, pharmaceutical pricing, private-label expansion, and employee compensation. CEO Ron Vachris confirmed the changes represent “the most ambitious modernization effort in over a decade” for the warehouse giant.
Change #1: 28 New Warehouses in Aggressive Expansion Push
Costco plans to open 28 new warehouses globally in fiscal 2026, maintaining an elevated expansion pace despite construction delays in Spain that reduced the initial target from 35 locations. Five represent relocations to larger sites with expanded parking and gas capacity.
This accelerated growth outpaces the company’s historical norm of 20-25 annual openings, targeting high-growth Sunbelt markets.
Change #2: Non-Traditional Formats Including Standalone Gas Station
Beyond standard warehouses, Costco is expanding Business Centers—specialized locations for small business customers with earlier hours and commercial-grade quantities.
The Mission Viejo standalone gas station represents an entirely new format with 40 pumps targeting 9,500 daily vehicle visits. Management indicated “increased interest in opening new Business Centers” particularly in Canadian markets.
Change #3: Food Court Membership Verification Goes Live
Digital scanners are being installed at Costco food courts nationwide to block non-members from accessing the iconic $1.50 hot dog combo. While technically member-only since 2020, enforcement varied widely until now.
Reddit users spotted inactive scanners in November 2025, with full rollout expected through early 2026, ending decades of casual access for non-members.
Change #4: Scan-and-Go Technology Rolls Out Nationwide
After trailing Sam’s Club for nearly a decade, Costco is rolling out Scan & Pay technology nationwide in 2026. Members can scan items via the Costco app while shopping, pay digitally, and exit after employee verification.
CEO Ron Vachris confirmed that pilot locations saw “20% faster checkout speeds,” prompting the aggressive expansion to catch competitors.
Employee Pre-Scanning Devices Complement Digital Tech
Complementing self-service technology, Costco employees now carry handheld scanners to pre-scan items while members wait in traditional checkout lines.
When customers reach the cashier, scanned data auto-populates the register, eliminating individual item handling. Early tests show 30-40% transaction time reductions, addressing persistent complaints about long wait times during peak hours.
Change #5: Pharmacy Partnership Introduces Cost-Plus Pricing
Effective January 1, 2026, Costco Pharmacy partnered with Navitus Health Solutions to offer cost-plus pricing at over 500 locations.
Drugs are priced at Costco’s acquisition cost plus a fixed markup and transparent dispensing fee, with 100% of manufacturer rebates passed to members. The model applies only to members whose employers or health plans contract with Navitus.
Change #6: Kirkland Signature Expands With 30+ New Products
Costco introduced over 30 new Kirkland Signature items in late 2025, with similar or accelerated rollout planned through 2026.
Recent launches include Dry Facial Daily Clean Towels, Crème Brûlée Bar Cake, and expanded organic foods. CFO Gary Millerchip stated that Kirkland products typically deliver “15-20% savings versus national brand equivalents of comparable quality”.
Supply Chain Localization Shields Against Tariff Chaos
Costco is shifting Kirkland Signature production closer to points of sale—sourcing regionally within the U.S., Canada, and Mexico rather than relying on Asian imports vulnerable to tariff policy shifts.
The strategy mirrors 2025 adjustments when Costco reduced inventory of artificial Christmas trees, toys, furniture, and décor while increasing domestically-sourced products.
Change #7: Guaranteed Wage Increases Lock In Through 2027
Costco’s March 2025 labor agreement guarantees $1.00 annual hourly wage increases through 2027, bringing top-of-scale clerks to $31.90 in 2026 and $32.90 in 2027.
The three-year contract averted threatened strikes by 18,000 Teamsters-represented workers across California, Washington, Maryland, Virginia, New Jersey, and New York.
Stock Stumbles Despite Industry-Leading Fundamentals
Costco’s stock declined approximately 5% in 2025, significantly underperforming the S&P 500’s 16% gain and Walmart’s 30% surge, despite maintaining a 92.2% U.S. membership renewal rate and 8.2% year-over-year sales growth.
The underperformance signals investor concerns about valuation multiples, competitive technology gaps with Sam’s Club, and tariff uncertainty.
Renewal Rates Remain Near Record Highs at 92.2%
Despite digital sign-up headwinds, Costco maintained U.S. membership renewal rates at 92.2% and global rates at 90.5%—both near historical peaks.
The retailer now serves 81.4 million paid members globally. CFO Gary Millerchip noted that 90% of members cite Kirkland Signature as a key renewal factor, underscoring private-label importance.
Sam’s Club Technology Lead Sparks Competitive Urgency
Sam’s Club has operated Scan & Go since 2016, with recent AI-powered exit verification arches that detect unscanned items without manual receipt checks.
This technological maturity contributed to Sam’s Club overtaking Costco in select customer satisfaction metrics for the first time in recent memory. Costco’s 2026 technology investments directly target this competitive gap.
Tariff Lawsuit Seeks Hundreds of Millions in Refunds
Costco filed a lawsuit in December 2025 requesting tariff refunds from the Trump administration, with the case currently under Supreme Court review.
The lawsuit underscores financial stakes estimated at hundreds of millions in import tax exposure on categories like electronics, home goods, and apparel. Management declined to discuss litigation details during Q1 2026 earnings.
Food Court Restrictions Draw Mixed Member Reactions
Frequent food court users will appreciate reduced wait times from non-member exclusion, while occasional visitors lose convenient, budget-friendly meal access.
For cost-conscious households, food court exclusivity marginally increases membership ROI, potentially improving renewal rates by 20-40 basis points among price-sensitive segments. The iconic $1.50 hot dog combo remains unchanged since 1985.
Mexico Flagship Becomes Largest Latin American Warehouse
Confirmed 2026 openings include a 200,000-square-foot flagship warehouse in Monterrey, Mexico—Costco’s largest Latin American location.
Additional projects are planned in Guilderland, New York, and expansion across Canada and select European markets. International growth represents approximately 30-35% of planned openings, consistent with management’s diversification strategy beyond North America.
Labor Costs Create Mid-Single-Digit Expense Headwind
Costco estimates wage increases create a 3-5% headwind to selling, general, and administrative expenses. With 272,000 U.S. and Canadian employees, each $1 hourly raise translates to roughly $500-600 million annual labor cost increase.
Over the three-year contract period, cumulative wage inflation approaches $1.5-2.0 billion, offset partially by productivity gains.
Employee Critics Challenge Real Wage Growth Claims
Despite wage increases, some employees argue raises fail to match inflation, particularly for workers receiving only $0.50 hourly bumps.
Critics note that percentage increases for top-scale workers (approximately 3.2% annually) lag official inflation rates of 3.5-4.5%, representing real wage stagnation. However, Costco’s average wage of $31+ per hour significantly exceeds retail industry norms.
Strategic Transformation Targets Revenue and Margin Protection
The seven initiatives collectively target revenue growth through warehouse expansion, margin protection via Kirkland localization and tariff mitigation, and retention through membership enforcement and technology.
Analysts project 9.21% EPS growth for 2026, reaching $19.69 per share, but achievement hinges on flawless execution across multiple dimensions simultaneously. The changes represent Costco’s biggest transformation in a decade.
Sources:
“Costco Wholesale Corporation Reports Fourth Quarter and Fiscal Year 2025 Operating Results.” Costco Investor Relations, September 2025.
“Costco to open first standalone gas station.” C Store Dive, June 2025.
“Navitus Partners with Costco Pharmacy to Advance Drug Price Transparency.” Business Wire, August 2025.
“Costco reveals a new approach that could reshape the chain.” The Street, December 2025.
“Costco to raise hourly pay, reaches tentative agreement with union.” Drug Store News, February 2025.