Costco runs gas stations at a loss to bait you into the warehouse where you'll spend $400 on things you didn't need.
This is called a loss leader. Retail 101. The expert quoted in this headline acts like he uncovered the Rosetta Stone when he said it's "straight out of the retail playbook." Yeah. It's literally page one of the playbook. Chapter titled "How to Make Idiots Think They're Saving Money."
The scheme works because Americans see gas at $3.19 instead of $3.39 and experience a dopamine hit so powerful they black out and wake up with a kayak in their trunk.
Higher gas prices drive record demand at Costco stations. Makes sense. Nothing says financial responsibility like waiting 25 minutes in a gas line to save $2.80 on a fill-up, then walking inside and dropping $150 on beef jerky and a patio umbrella you'll use once.
The membership fee is the tell. You pay $65 a year for the privilege of buying discounted gas that leads you directly into a fluorescent-lit temple of bulk purchasing regret. Costco doesn't make money on gas. They make it when you convince yourself that 48 rolls of paper towels is a reasonable purchase for a two-bedroom apartment.
Every car in that gas line is driven by someone who thinks they're beating the system. They're not beating anything. They're performing exactly as designed. Pavlov rang a bell. Costco dropped gas prices. Dogs salivated. Humans bought a 72-count box of granola bars.
The expert nailed it though. This strategy is straight out of the retail playbook, right next to "put milk in the back of the store" and "make the exit path wind through impulse buys." Congratulations on reading.
You're not saving money at Costco. You're spending more efficiently.
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