I have been going to Costco since my college days at WPI, where me and my roommates would go once a semester and stock up. The visits saved us a ton of money with low pricing and bulk products, suitable for our low budget and disorganized planning. It worked very well for us!
Today, I´m still impressed about the consistent success the company has had over the years. It´s now the 3rd largest global retailer and shows no signs of slowing down – they are growing sales 10% YoY.
Its stock has also noticed as it is at its all-time high.
I recently visited Costco stores in Miami (twice in a week). The visits shocked me for a number of reasons:
- The parking lots were really packed, even on a Monday @ 3pm.
- People at the store had their carts full. (see picture)
- The Costco gas station had a 10 car wait line
- I knew Kirkland was a strong brand, doing 32bn in revenue/yr but I was amazed about its pricing power. Kirkland 12 yr scotch whiskey was 25% lower than Black Label.
- Return policy takes minutes and you get a full refund – amazing customer service
- The hot dogs are still great and super cheap
As you can tell, I really liked the experience.
Not all was perfect, I tried getting some mixers for an event and was unable to find anything. No variety and only a premium brand for sodas + didn’t have tonic water or diet coke. Part of the deal!
Still, I have yet to meet the person who dislikes the Costco experience.
If you have time, read this presentation on the Costco business model, which I think is on-point. I believe Costco has a great business model being executed well, which makes it incredibly difficult to compete against (even for Amazon). Will be interesting to see how the company adapts to changing food/online delivery trends in years to come but my feeling is that Costco is here to stay for a while.
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