Costco Wholesale hit the headlines with its first-time entry into the United States’ stand-alone gas station market, choosing Mission Viejo, California as the location for its first such station. The step is a drastic departure from Costco’s business model, as the retailer giant enters for the first time with fuel stations that are separate from its conventional warehouse stores.
Location details and development timeline
The new stand-alone gas station will be located in the upscale Mission Viejo suburb of Orange County, roughly halfway between Los Angeles and San Diego. Precisely, the complex will be located at 25732 El Paseo in the Mission Viejo Freeway Center, strategically situated off Interstate 5. The high-visibility location, previously held by a Bed Bath & Beyond store, will be redeveloped as Costco’s biggest gas station to date.
Construction will be under way in the fall of 2025, and public opening day set for spring 2026. The city of Mission Viejo sanctioned through the master plans in March, and building and grading permits are pending approval. The project is a significant investment in the community, and Mission Viejo Mayor Robert Ruesch would like to see the station produce “thousands of drivers.”
Facility features and operations
The new facility will be large in terms of size, with 40 pumps under a 17,185-square-foot canopy of gasoline. The station won’t have a convenience store as do most gas stations. Instead, it will handle fuel sale only, with the building being reserved for Costco members alone. The members will be required to produce membership details to gain access to the pumps.
Opening hours will likely be 5 a.m. to 10 p.m., seven days per week. This is consistent with Costco’s recent companywide expansion of gas station hours, now typically operating between 6 a.m. and 10 p.m. Monday to Friday, 6 a.m. and 8:30 p.m. Saturday, and 6 a.m. and 7:30 p.m. Sunday. The building will be operated by Costco staff and will include six parking bays, three 40,000-gallon underground storage tanks, and an employee break room with a bathroom.
Strategic importance to Costco
This independent gas station is not simply a physical expansion; it is the harbinger of a strategic shift in Costco’s business model. Gasoline is becoming more and more valuable to the retailer, and the retailer booked its two best weeks of gallon sales in the U.S. during April 2025 when it expanded the operating hours of its gas stations and opened new ones to start the year.
Although gasoline usually carries lower profit margins than other merchandise, it keeps traffic and maximizes membership worth. By putting a membership fee to purchase its competitor-reduced fuel, Costco has a continuous flow of cash from member fees that are said to drive roughly 75% of its earnings. Management estimates internally that the stand-alone stores would provide a 3-5% increase in renewal rates on memberships in markets where it is used.
Impact to the local residents
Mission Viejo, home to approximately 92,415 residents and median household income of $136,071, represents a prime market for Costco’s high-end services. The gas station will situate itself in a heavily trafficked retail zone that houses big-box retailers such as Krispy Kreme, Petco, and Best Buy. The building, when open for business, will directly compete with current fuel vendors in the region such as Circle K, Chevron, and BP.
The addition goes against two prevailing trends: the growing trend of electric vehicles and the well-liked trend of having gas stations in conjunction with convenience stores. But Costco’s membership format and track record of low prices place it in a class of its own. For the people of Mission Viejo, whose median age is 46.1 and the percentage homeownership is 77.5%, the addition of a Costco gas station is convenient access to cheap fuel without the need to stop at the warehouse store.
If successful, this first-of-its-kind operation could be expanded to other markets, potentially revolutionizing the way Costco engages its members across the country.
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