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I worked at Costco while in college many years ago and I got to see how the gas price was set for my specific warehouse.

Someone would drive out to a few neighboring gas stations, record prices, and set ours ~10 cents lower.

That’s it. That’s how the price was set.

Aside, working there was very good for a college job and I was treated very respectfully for the summers I was there.

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I’m betting stores are given a floor price/cost and are given the flexibility to raise above that up to 10 cents cheaper than the nearest competitors in the specific area. All stores do not have the same ability/flexibility

Some retailers price some products at lost, it those products drive consumers to the store. Say neighboring gas stations sell gas with no profit, and Costco prices 10 cents less, losing the whole 10 cents. A car holds around 15 gallons, so Costco loses $1.5 on the refuel: but then a good chunk of the gas buyers are now with the car in your store, maybe even with a fresh idea of "fuel is so expensive that I need to avoid needless trips", so "as we are already here, lets buy some things I need".

Costco has a reputation for treating its workers very well, probably the best option in the retail world.

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