Inflation, or rising prices, as most people think of it, has hit many Americans hard.
“A majority of Americans, 55%, say rising prices have caused financial hardship for their household. This percentage is essentially unchanged from August after increasing in two prior measurements. A steady 13% of Americans say higher prices are causing a severe hardship for their family,” according to Gallup survey.
The data shows that there are some positive signs.
“There are signs that inflation is easing, even though prices remain higher now than they were a year ago. The fact that Americans’ self-reports of financial hardship are leveling off rather than declining is likely a reflection of just how much prices have risen over the past year, and how much further inflation needs to subside before most Americans no longer feel burdened by it,” added Gallup.
Costco has been one of the few retailers to speak extensively about inflation. During its second-quarter earnings call, CFO Gary Millerchip offered clear insight into which prices are going up and which are falling.
Related: History of Costco: Company timeline and facts
Costco offers inflation insight
“On inflation, in general, you heard it exactly right that we did see — we’ve been talking about low to mid-single-digit inflation. It was slower in the second quarter, trending towards sort of low single digits,” Millerchip shared.
He did not deny that the situation in the Middle East (as he called the war in Iran) has made things volatile. But he shared that the prices on some key items have actually come down.
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“As we look at what happened during the second quarter for us, fresh and food and sundries really drove the lower inflation overall. Ron mentioned it, but we’ve seen deflation in produce, eggs, butter, cheese, some of these commodities. And they have a meaningful impact, as you might imagine, on food and sundries in particular,” he shared.
Some prices, however, have gone up.
“We do still see some areas of the business that are inflationary. Beef remains fairly inflationary. And candy is still seeing — I think, still seeing some of the flow-through that we’ve seen historically and some of the commodity impacts there as well,” he added.
Costco’s gas tends to be the cheapest in any market because the warehouse club wants to bring members to its stores.
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Costco wants to lead on gas
Gas prices have been rising because of the war in Iran and seasonal consumption patterns.
“The national average for a gallon of regular gasoline is up 10 cents from last week and one dollar since last month. [It has been a] steep rise from $2.98 on February 26 to $3.98 today. Crude oil prices remain high as the Iran conflict nears the 4-week mark,” according to AAA.
Prices are not expected to come down until the situation in the Middle East reaches a conclusion.
“The national average could reach $4/gallon in the coming days for the first time since August 2022. Gasoline demand is also on the rise as spring break season continues, another factor in rising pump prices,” AAA reported.
Costco cannot stop the price of gas from rising, but it has traditionally been a price leader in that space.
“We want to be the pricing authority on gas,” Millerchip shared.
The CFO also noted that rising gas prices tends to be good for the warehouse club.
“And so when prices are higher, that will tend to cause members to maybe take the extra mile that it might be involved to get to the gas station because of the incremental value they see there,” he added.
“You save approximately 20 cents a gallon at Costco over other local vendors,” David Schwartz, who, with his wife Susan, authored “The Joy of Costco,” told CNBC. “That’s something we have seen time and time again across the country.”
So, that’s $1 in savings, on average, for every five gallons of gas you buy. That means if you buy 325 gallons of gas per year, you pay for your membership in savings.
Americans still face inflation fears
Analysts say rising gas prices and persistent inflation are driving more Americans to seek out retailers like Costco, where membership savings on essentials help offset higher everyday costs.
“Inflation is the pace at which prices rise, and the newest data show incremental slowing,” according to U.S. Bank.
- The February 2026 Consumer Price Index (CPI) held at 2.4% over the past year and rose 0.3% for the month, which keeps the “last mile” back toward the Federal Reserve’s (Fed) 2% inflation target in focus.
Tariffs and global unrest remain risks.
“Investors watch inflation closely because of the impact on personal budgets, making tariff-related impacts an important topic,” said Bill Merz, head of capital markets research for U.S. Bank Asset Management Group.
Gas prices have an outsized impact on the economy even when other costs fall.
“For most consumers, you can’t avoid gasoline price increases. It functions like a tax, very similar to a tariff,” Luke Tilley, Wilmington Trust chief economist and the Philadelphia Federal Reserve’s former economic adviser, told Yahoo Finance.