<div id="readability-page-1"><div> <h2>Key Points</h2><ul><li>Costco members have higher average incomes than customers of its biggest competitors at Amazon and Walmart.</li><li>The warehouse retailer earned about 10% of its net income from gasoline sales in 2025.</li><li>Higher prices at the pump don’t have to be bad news for Costco shareholders.</li><li>10 stocks we like better than Costco Wholesale ›</li></ul>Lower-income American consumers are running out of money. The price of gas has spiked in recent months due to the Iran war, reaching $4.55 per gallon according to AAA, the highest level since 2022.If consumers cut back on spending due to higher gas prices, this could be bad news for the retail sector and consumer discretionary stocks. Recent analysis from Bloomberg found that CEOs are mentioning gas prices more often on earnings calls. What does this mean for warehouse retailers like Costco (NASDAQ: COST)?Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an &#34;Indispensable Monopoly&#34; providing the critical technology Nvidia and Intel both need. Continue »The company's stock is up about 17% year to date, outperforming the S&amp;P 500 index and about on par with its major competitor, Walmart (NASDAQ: WMT). During the past five years, Costco shares have slightly lagged behind Walmart's performance but have strongly outperformed other major retail stocks like Target (NYSE: TGT), Home Depot (NYSE: HD), and Amazon (NASDAQ: AMZN).<img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vbWVkaWEueWNoYXJ0cy5jb20vY2hhcnRzLzFlN2UzYTdkZTRlNzUzODE5MDI4NWEzMWI4MWJmMjVhLnBuZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="492" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vbWVkaWEueWNoYXJ0cy5jb20vY2hhcnRzLzFlN2UzYTdkZTRlNzUzODE5MDI4NWEzMWI4MWJmMjVhLnBuZyZ3PTcwMA"/>COST data by YChartsHere are a few reasons why Costco stock might be recession proof, even if some consumers cut back on spending.<h2>Costco members are still spending -- and renewing</h2>A big trend in retail is the &#34;K-shaped economy.&#34; Fed research shows that most retail spending growth in the past few years has come from high-income households earning more than $125,000 per year. These people can handle higher inflation (and keep shopping at higher prices), even while lower-income customers might feel pressured to cut back.Good news for Costco shareholders: Costco shoppers tend to be from high-income households. Research from Numerator shows that 40% of Costco members have incomes of $125,000 or higher. A 2023 study from the Northwestern University Medill School of Journalism found that Costco members had an average household income of $81,200, which was higher than members of Walmart+ ($61,500) and Amazon Prime ($66,200).<img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2NTgyOS9nZXR0eWltYWdlcy0xMTQ2MjU5Mzg5LTEyMDB4ODAwLTViMmRmNzkuanBnJnc9NzAw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="467" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2NTgyOS9nZXR0eWltYWdlcy0xMTQ2MjU5Mzg5LTEyMDB4ODAwLTViMmRmNzkuanBnJnc9NzAw"/>Image source: Getty Images. The company also boasts a high rate of member retention. As of the end of fiscal 2025, Costco's member renewal rate in the U.S. and Canada was 92.3%. This indicates strong customer loyalty -- people are unlikely to cancel their Costco memberships in both good times and bad.On the company's most recent quarterlyearnings callin March, CFO Gary Millerchip said, &#34;We are seeing our members are willing to and have the capacity to spend.&#34;<h2>Higher gas prices could be good for Costco's business</h2>Higher gas prices aren't good news for the economy, and pain at the pump is a real burden for many lower-income households. But Costco is well positioned to survive and succeed in an environment of higher gas prices.That's because Costco sells a lot of gasoline. The company's gasoline business made up about 10% of its total net sales in 2025. And its lower-price gas pumps can be a good point of entry to attract new members or drive more repeat business from existing members.On the company's latestearnings call Millerchip said that &#34;about half of members that will shop at the gas station will also cross-shop at the warehouse.&#34; Even if gas prices rise from their current levels, Costco might become a more attractive place for consumers to buy groceries and other household items.Costco members tend to be more affluent than average and are likely to keep shopping. The company seems well positioned to keep thriving even if lower-income consumers cut back on their spending. I'd rate this stock as a solid buy.<h2>Should you buy stock in Costco Wholesale right now?</h2> Before you buy stock in Costco Wholesale, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Costco Wholesale wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $471,827!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,319,291!* Now, it’s worth noting Stock Advisor’s total average return is 986% — a market-crushing outperformance compared to 207% for the S&amp;P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 11, 2026. Ben Gran has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, Home Depot, Target, and Walmart. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. </div></div>

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Costco's stock may be recession-proof due to its affluent member base, with 40% earning over $125,000. The company benefits from high member retention rates (92.3%) and a significant gasoline business, which accounted for 10% of net sales in 2025. Despite rising gas prices, Costco's lower prices attract consumers, potentially boosting grocery sales. Analysts suggest Costco remains a solid buy, although it wasn't listed among the top 10 stocks recommended by The Motley Fool's Stock Advisor team.

Why Costco Stock Could Be Recession-Proof