Costco Wholesale (COST 0.05%) has a dependable business model that offers high value for members in exchange for an annual fee. It tends to be inflation-resistant, since it offers rock-bottom prices on products, generating even higher volume and sales as prices begin to rise. In fact, while most companies tout wide gross margins, Costco aims for razor-thin margins. The lower the price, the greater the chance of boosting loyalty and volume, while the company benefits from membership fees that go straight to the bottom line.
Low prices are always in demand, but Costco has three new growth drivers you may not know about that are adding momentum.
1. Executive membership in China
Executive members have long been a growth driver for Costco. This membership costs double the standard membership of $65 in the U.S., and members get perks like cashback and special shopping hours. Executive membership grows every quarter, adding new revenue to the total.
Image source: Costco.
In the 2026 fiscal third quarter (ended May 10), executive members increased 9.6% from last year to 41.2 million. This group is highly loyal, accounting for about half of paid memberships but 75% of total sales.
Costco launched executive memberships in China in Q3, and management says it had "seen a higher level of activity than we had initially expected." Costco launched in China in 2019, and it has seven warehouses there. The region remains a massive long-term opportunity.
2. Online registrations
Costco has moved into e-commerce, but its model doesn't work with e-commerce in quite the same way as a traditional retailer. It doesn't ship products, but it has other digital services, like in-store pickup and partnerships with third-party delivery companies.
One of its more recent digital options is online registration. This opens it up to a wider audience of potential members, and specifically a younger one. Management has said that the average member age is lower due to online signups, which means these members can stay with Costco even longer.
The flip side of this development is that they tend toward a slightly lower renewal rate.
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3. Same-day delivery
One of Costco's e-commerce services is same-day delivery through partners like Instacart. The average time for delivery in the U.S. is 45 minutes, with a 4.8 out of 5 satisfaction level. It's also launching the service in other markets, including Spain and France.
Management said this service is growing faster than digital overall, and that the company's highest spenders are using it, driving greater loyalty.
Costco reported an 11.6% sales increase in Q3, a major acceleration, and it has plenty of levers to pull to keep that up.
