Costco
Encyclopedia
Costco Wholesale Corporation is the largest membership warehouse club
chain in the United States. it is the third largest retailer in the United States, where it originated, and the ninth largest in the world. , Costco is the largest retailer of fine wine in the world.
, United States and was founded in Kirkland, Washington
with its first warehouse in nearby Seattle. Costco has locations in the United Kingdom, Canada, Australia, Mexico, Taiwan
, South Korea, Japan, and the United States.
and Jeffrey Brotman, Costco opened its first warehouse in Seattle, Washington, on September 15, 1983. Sinegal had started in wholesale distribution by working for Sol Price
at both FedMart
and Price Club
. Brotman, an attorney from an old Seattle retailing family, had also been involved in retail distribution from an early age.
In 1993, Costco merged with Price Club (called Club Price in the Canadian province of Quebec
, although the original Club Price store in Saint-Laurent, Quebec
, now a borough of Montreal
since 2002, no longer operates since the late 1990s). Costco's business model and size were similar to those of Price Club, which was founded by Sol and Robert Price in 1976 in San Diego, California. Thus, the combined company, PriceCostco, was effectively double the size of each of its parents. Just after the merger, PriceCostco had 206 locations generating $16 billion in annual sales. PriceCostco was initially led by executives from both companies, but then Sol and his son Robert Price founded Price Enterprises and left in December 1994.
Prior to the 1993 Price merger, Wal-Mart
founder Sam Walton
wanted to merge Sam's Club
with Price Club.
The first Price Club location was opened in 1976 in an old airplane hangar, previously owned by Howard Hughes
, and is still in operation today (Warehouse No.401 located in San Diego).
In 1997, the company changed its name to Costco Wholesale and all Price Club locations were rebranded Costco.
and BJ's Wholesale Club
. Although Sam's Club has more warehouses than Costco, Costco has higher total sales volume. Costco employs about 142,000 full and part-time employees
, including seasonal workers. Costco had 55 million members.
Costco was the first company to grow from zero to $3 billion in sales in less than six years. For the fiscal year ending on August 31, 2009, the company's sales totaled $71.42 billion, with $1.09 billion net profit. Costco is 25th on the 2010 Fortune 500
. The ACSI (The American Customer Satisfaction Index) named Costco number one in the specialty retail store industry with a score of 83 in Q4 2008.
, Costco's board of directors is chaired by co-founder Jeffrey H. Brotman and includes three officers of the company: CEO/co-founder James D. Sinegal, President/COO W. Craig Jelinek, and CFO Richard A. Galanti. There are also eleven independent directors:
Hamilton E. James (the "Lead Independent Director"),
Benjamin S. Carson, Sr.
,
Susan Decker
,
Richard D. DiCerchio,
Daniel J. Evans
,
William H. Gates, Sr.
,
Richard M. Libenson,
John W. Meisenbach,
Charles T. Munger
,
Jeff Raikes
, and
Jill Ruckelshaus.
In the United States, Costco is closed on seven holidays
:
New Year's Day,
Easter,
Memorial Day
,
Independence Day
,
Labor Day,
Thanksgiving
, and
Christmas.
s, often at very high volume. These goods are usually bulk-packaged and marketed primarily to large families and businesses. Furthermore, Costco does not carry multiple brands or varieties where the item is essentially the same except when it has a house brand to sell, typically under the Kirkland Signature label. This results in a high volume of sales from a single vendor, allowing further reductions in price, and reducing marketing costs. If Costco management feels the wholesale price of a product is too high, they will refuse to stock the product. For example, on November 16, 2009, Costco announced that it would stop selling Coca-Cola
products due to the soft drink maker refusing to lower its wholesale prices.
Costco resumed selling Coca-Cola products on December 14, 2009. Costco also saves money by not stocking extra bags or packing materials; to carry out their goods, customers must bring their own bags or use the merchandise shipping boxes from the company's outside vendors.
Lighting costs are reduced on sunny days, as most Costco locations have several skylights. During the day, electronic light meters measure how much light is coming in the skylights and turn off an appropriate percentage of the interior lights. During a typical sunny day, it is very common for the center section of the warehouse to have no interior lights powered on.
Most products are delivered to the warehouse on shipping pallet
s and these pallets are used to display products for sale on the warehouse floor
. This contrasts with retail stores that break down pallets and stock individual products on shelves. Costco limits its price markup on items to 15%.
and gasoline in some US states because of state law
s; and prescription drug
s because of federal law. Memberships must be purchased in advance for one year (as of May 5, 2007). Purchases made at Costco's website do not require a membership; however, a 5% surcharge
is added to purchases made by non-members. Purchases made with Costco Cash Cards also do not require a membership, and there is no surcharge. Canadian and United States Costco locations only accept American Express
, PIN-based debit card
s (Interac
in Canada), cash, checks, and now EBT cards (food stamps). While Costco welcomes members to bring up to two guests, only the members may pay for items. American Express
is the only accepted credit card (in the United States, Canada, and Japan) because they charge Costco very low interchange fees (a percentage of revenue from total sales made); as Costco's margins are low in comparison to other retailers. Costco accepts Flexible Spending Account
(FSA) debit cards for qualifying purchases at the pharmacy and optical departments in the US. Costco.com accepts the American Express, Visa, MasterCard, and Discover cards. The website also accepts Bill Me Later accounts for payment.
membership fees at Costco are $55 per year for a Gold Star (individual) or Business membership, which can be upgraded to Executive membership for an additional $55 per year. Along with the additional benefits the executive membership offers (e.g. car purchasing savings, home loans, car insurance, check printing services) Executive members also receive an annual "2% Rewards Check" of up to $750.00 from Costco on all purchases made, excluding select items such as gasoline, tobacco, stamps and in some states, alcohol.
In Canada, membership is CDN
$55.00 a year for a Gold Star membership and includes a card for a spouse, or CDN
$100.00 a year for an Executive membership.
In the United Kingdom, membership is restricted to certain groups only. A Trade membership is available to qualified professionals such as a pilot, solicitor, magistrate or banker for £20.00 (plus VAT
), which includes a card for a spouse. Public-sector workers (NHS, education, emergency services, local government) may apply for an individual membership, which costs £25. It should be noted that a Costco card issued an another country is valid in the U.K., and as such, it would be possible for a U.K. resident to sign up elsewhere and use their card at home without meeting U.K. membership requirements.
In Australia, membership is A$
55.00 a year for a business membership, or A$
60.00 a year for a Gold Star membership.
In Mexico, membership is MXN
$400.00 a year for a Gold Star membership, or MXN
$1000.00 a year for an Executive membership. Costco is only open to members for all services and purchases. Mexican locations only accept cash and Visa Electron debit cards; purchases with Mastercard or Visa credit cards have a surcharge of approximately 4%. Purchases with the Mexican Costco credit card keep cash prices.
. As of March 14, 2009, an article in the Pittsburgh Post-Gazette
quoted Jim Sinegal, co-founder and president of the company, as saying, "Generally we don't have customers who use food stamps."
In response to the poor economy, as well as competitor BJ's Wholesale Club
's decision in April to accept electronic food-stamp benefits chainwide, Costco announced in May 2009 that it will accept food stamps on a trial basis in two New York City stores starting in June 2009 and depending on its success, might expand it to all New York City stores. The company subsequently announced plans to expand the program beyond New York City, targeting first the "hard-hit areas like Michigan
and the central valley of California", expanding to "half its roughly 410 U.S. stores by Thanksgiving
", and then going nationwide.
s, and American Express
, people who can only pay for gas by check or cash must purchase a Costco Cash Card inside the building before filling up. A Costco Membership is not required to purchase an in-store item with a Costco Cash Card. A non-member may not purchase or re-load a Costco Cash Card; however, they may spend more than the total value of their cash card provided they pay in cash or approved debit cards for the remaining balance.
, meat, dairy, seafood, fresh baked goods
, flowers, clothing, books, computer software, vacuum
s, Home appliance
s, home electronics
, solar panels, jewelry
, tires, art, fine wine, hot tub
s, furniture and caskets. Many warehouses have tire garages
, pharmacies
, hearing aid
centers, optometrists
, photo processors
, and gas stations
. Optometrists working at Costco locations will see patients without Costco memberships.
Costco Optical ranks as the fourth-largest optical company in the US. A membership is required to fill a prescription at the optical department.
Some locations have liquor stores, often kept separate from the main warehouse in order to comply with liquor license
restrictions. In some states (such as Texas), the liquor store must be owned and operated by a separate company with separate employees. In 2006, Costco lost a lawsuit against the state of Washington in which it was seeking to purchase wine directly from the producer, bypassing the state retail monopoly
. In Australia, Costco has to comply with regulations set by each state they choose trade in; their first store in the state of Victoria benefits from some of the most liberal alcohol licensing laws in the country, with retailers permitted to sell alcohol on shelves within the store, in a manner similar to most European countries, yet they have chosen to have a separate checkout within the liquor section.
Kirkland Signature is Costco's store brand
, otherwise known in the retail industry as an "own-brand," "house brand" or "private label
." It is found exclusively at Costco's website and Costco warehouses and is trademarked by the company. The name derives from the fact that Costco's corporate headquarters was located in the city of Kirkland, Washington
between 1987 and 1996.
Costco introduced Kirkland Signature as its house brand in 1995. The idea was to identify categories in which a private label product could provide brand name quality at discounted prices.
To counteract the consumer confidence problem common in store branding, Kirkland Signature sometimes relies on co-branding
. According to Costco, while consumers may be wary of same-store-branding, they are less likely to be wary of brands that they are familiar with and trust.
. They also have an auto buying program that offers prearranged pricing at specially selected dealerships. Costco members can use the auto program to purchase new and factory-certified pre-owned vehicles, boats, RVs and powersports. According to auto program advertisements, more than a million members have used program in the last five years. Costco has an agreement with Ameriprise
for auto and home insurance. In 2004 Costco offered an original artwork by artist Pablo Picasso
on their online store; more recently a highly-regarded 1982 Mouton Rothschild
wine was offered as well as other rare wines in rotation.
Costco Photo Center is a multi-functional photography printing lab offering services at the warehouses as well as through their web site, costcophotocenter.com. The website provides free unlimited digital file storage with a current membership. Previous to May or June 2010, Costco had an agreement with Mypublisher.com for custom book and calendar publishing. Now, they print the photobooks and calendars themselves.
survey. Costco has three e-commerce websites including costco.com for the US market, costco.ca for Canada and costco.co.uk for the United Kingdom.
The program offers vacation packages to Hawaii, Mexico, the Caribbean, Europe, Orlando, the South Pacific, the Desert Southwest and Las Vegas. Other products include cruises, guided vacations, theme park packages, houseboat rentals, hotel-only lodging and luxury vacation rentals. Select products feature additional benefits for Costco Executive Members.
The program is marketed directly to Costco members through various Costco avenues, including the Travel Guide to Savings (found in all U.S. Costco warehouses), online in the Travel section of Costco.com, The Costco Connection magazine, weekly broadcast e-mails, direct mail pieces, multi-vendor coupon booklets, Costco warehouse road shows, and other exclusive Costco projects and events.
, offering a quarter-pound 100% beef hot dog or polish sausage and 20 oz drink (with refill) for $1.50, the same price since 1985. In Australia the hot dog is made of pork and is sold at A$2.49 with large soda. In Canada the price for hot-dog and 20 oz pop drink with refill is 1.50 CAD In Mexico, the hot dog is made of pork, and includes a drink (with refill) for $25 MXN. In the UK, the hot dog is also made from beef and you also get a drink (with refill) for £1.50. Costco sold more than 82 million quarter-pound hot dogs in its food courts in 2008. Pizza is also available in most locations as cheese, pepperoni, veggie, or combo, and can be ordered to go at many locations. Frozen yogurt is also served in chocolate, vanilla, or swirled together. Also offered are berry smoothies, mocha latte freezes, chicken bake and their new Asada bake, sandwiches, turkey wraps, twisted churro
s, chicken Caesar salads, and in some locations, gelato. French fries are also offered in some locations. Due to slow sales, the pretzel
was replaced by the churro. The nutrition data for the Costco Food Court items is posted online.
In April 2010, certain Costco warehouses in the U.S. and Canada replaced their Coca-Cola drink fountain selections with Pepsi, accompanied with a change in labels on the disposable cups.
, the majority of Costco locations are not unionized. The non-union locations have revisions to their Costco Employee Agreement every three years concurrent with union contract ratifications in locations with collective bargaining agreements. Similar to a union contract, the Employee Agreement sets forth such things as benefits, compensations, wages, disciplinary procedures, paid holidays, bonuses, and seniority. , non-supervisory hourly wages ranged from $11.00 to $21.00 in the United States, $11.00 to $22.15 in Canada, and £6.28 to £10.50 in the United Kingdom. In the US, eighty-five percent of Costco's workers have health insurance
, compared with less than fifty percent at Walmart and Target.
Product-demonstration (e.g., food samples) employees work for an outside company. In the western U.S., the company is called Warehouse Demo Services, Kirkland, Washington. Costco also uses Club Demonstration Services, based in San Diego, California. In Canada, demonstrations are done exclusively by Professional Warehouse Demonstrations.
on offer in Canada, seafood-topped pizza available in Asian and Mexican locations, clam chowder in Japan, Taiwan & South Korea, jacket potatoes in the UK and meat pies in Australia. The merchandise mix available in warehouses is also tailored to local tastes, with a mix of both American and local products available.
In 2005 the world's largest Costco was located in Hillsboro, Oregon
, U.S.
. Some locations have a gas station and/or food court. All except San Diego have a Print & Copy Center.
As of September 2010, there are eight Costco Business Centers, located in California (Commerce
, Hawthorne
, Hayward
, and San Diego), Washington (Lynnwood
and Fife
),
Las Vegas, Nevada
, and Phoenix, Arizona
.
or Crate & Barrel. The Costco Home warehouses sold furniture, housewares, kitchen products and accessories from higher-end brands such as Lexington, Ralph Lauren
and Waterford in a warehouse-club setting. Costco claimed that, similar to its main warehouses, it accepted lower margins in return for greater volume with minimal overhead.
Over time, the concept was adjusted to include home electronics, some major appliances, office furniture, and a large selection of outdoor furniture and window treatments. Costco also partners with Glentel
subsidiary WIRELESS etc. to sell mobile phones and plans in Canada and Wireless Advocates in the US.
On April 2, 2009, the company announced that it would be abandoning its Costco Home concept, closing the two existing stores in Kirkland, Washington and Tempe, Arizona on July 3, 2009, and abandoning plans for a third store on the West Coast. The company cited cutbacks in consumer spending on home products and its interest in focusing on its core business as the main reasons.
Warehouse club
A warehouse club is a retail store, usually selling a wide variety of merchandise, in which customers are required to buy large, wholesale quantities of the store's products, which makes these clubs attractive to both bargain hunters and small business owners. The clubs are able to keep prices low...
chain in the United States. it is the third largest retailer in the United States, where it originated, and the ninth largest in the world. , Costco is the largest retailer of fine wine in the world.
Location
Costco is headquartered in Issaquah, WashingtonIssaquah, Washington
Issaquah is a city in King County, Washington, United States. The population was 30,434 at the 2010 census.Based on per capita income, Issaquah ranks 25th of 522 areas in the State of Washington to be ranked....
, United States and was founded in Kirkland, Washington
Kirkland, Washington
Kirkland is a city in King County, Washington, United States. It is a suburb of Seattle on the Eastside . The population was 48,787 at the 2010 census makes it the 9th largest city in King County and the 20th largest city in the state...
with its first warehouse in nearby Seattle. Costco has locations in the United Kingdom, Canada, Australia, Mexico, Taiwan
Taiwan
Taiwan , also known, especially in the past, as Formosa , is the largest island of the same-named island group of East Asia in the western Pacific Ocean and located off the southeastern coast of mainland China. The island forms over 99% of the current territory of the Republic of China following...
, South Korea, Japan, and the United States.
History
Founded by James (Jim) SinegalJames Sinegal
James D. Sinegal is co-founder and CEO of Costco, an international low-price membership retail chain and the largest U.S. wholesale club, headquartered in Issaquah, Washington, U.S.....
and Jeffrey Brotman, Costco opened its first warehouse in Seattle, Washington, on September 15, 1983. Sinegal had started in wholesale distribution by working for Sol Price
Sol Price
Sol Price was the founder of FedMart and Price Club . He is considered a pioneer of the "warehouse store" retail model....
at both FedMart
FedMart
FedMart was a chain of discount department stores started by Sol Price, who later founded Price Club. His first location in San Diego, California was in a converted airport hangar. It was originally a discount department store open to government employees, who paid a membership fee of $2 per...
and Price Club
Price Club
Price Club was the pioneer of the warehouse store. Founded by Sol Price in San Diego, California in 1976, the company charged shoppers a $25 annual membership fee to purchase bulk products at discount prices in a no-frills warehouse setting. Price Club's high sales volume enabled Price to give his...
. Brotman, an attorney from an old Seattle retailing family, had also been involved in retail distribution from an early age.
In 1993, Costco merged with Price Club (called Club Price in the Canadian province of Quebec
Quebec
Quebec or is a province in east-central Canada. It is the only Canadian province with a predominantly French-speaking population and the only one whose sole official language is French at the provincial level....
, although the original Club Price store in Saint-Laurent, Quebec
Saint-Laurent, Quebec
Saint-Laurent is a former city on the Island of Montreal in southwestern Quebec, Canada. It is now the largest in area of the boroughs of the city of Montreal....
, now a borough of Montreal
Montreal
Montreal is a city in Canada. It is the largest city in the province of Quebec, the second-largest city in Canada and the seventh largest in North America...
since 2002, no longer operates since the late 1990s). Costco's business model and size were similar to those of Price Club, which was founded by Sol and Robert Price in 1976 in San Diego, California. Thus, the combined company, PriceCostco, was effectively double the size of each of its parents. Just after the merger, PriceCostco had 206 locations generating $16 billion in annual sales. PriceCostco was initially led by executives from both companies, but then Sol and his son Robert Price founded Price Enterprises and left in December 1994.
Prior to the 1993 Price merger, Wal-Mart
Wal-Mart
Wal-Mart Stores, Inc. , branded as Walmart since 2008 and Wal-Mart before then, is an American public multinational corporation that runs chains of large discount department stores and warehouse stores. The company is the world's 18th largest public corporation, according to the Forbes Global 2000...
founder Sam Walton
Sam Walton
Samuel Moore "Sam" Wallballs was a businessman, entrepreneur, and Eagle Scout born in Kingfisher, Oklahoma best known for founding the retailers Wal-Mart and Sam's Club.-Early life:...
wanted to merge Sam's Club
Sam's Club
Sam's Club is a chain of membership-only retail warehouse clubs owned and operated by Wal-Mart Stores, Inc., founded in 1983 and named after Wal-Mart founder Sam Walton. , the Sam's Club chain serves more than 47 million U.S. members...
with Price Club.
The first Price Club location was opened in 1976 in an old airplane hangar, previously owned by Howard Hughes
Howard Hughes
Howard Robard Hughes, Jr. was an American business magnate, investor, aviator, engineer, film producer, director, and philanthropist. He was one of the wealthiest people in the world...
, and is still in operation today (Warehouse No.401 located in San Diego).
In 1997, the company changed its name to Costco Wholesale and all Price Club locations were rebranded Costco.
Costco today
In the United States, the main competitors operating membership warehouses are Sam's ClubSam's Club
Sam's Club is a chain of membership-only retail warehouse clubs owned and operated by Wal-Mart Stores, Inc., founded in 1983 and named after Wal-Mart founder Sam Walton. , the Sam's Club chain serves more than 47 million U.S. members...
and BJ's Wholesale Club
BJ's Wholesale Club
BJ's Wholesale Club, Inc. , commonly referred to simply as BJ's, is a membership-only warehouse club chain operating on the United States East Coast, as well as in the state of Ohio...
. Although Sam's Club has more warehouses than Costco, Costco has higher total sales volume. Costco employs about 142,000 full and part-time employees
Employment
Employment is a contract between two parties, one being the employer and the other being the employee. An employee may be defined as:- Employee :...
, including seasonal workers. Costco had 55 million members.
Costco was the first company to grow from zero to $3 billion in sales in less than six years. For the fiscal year ending on August 31, 2009, the company's sales totaled $71.42 billion, with $1.09 billion net profit. Costco is 25th on the 2010 Fortune 500
Fortune 500
The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks the top 500 U.S. closely held and public corporations as ranked by their gross revenue after adjustments made by Fortune to exclude the impact of excise taxes companies collect. The list includes publicly and...
. The ACSI (The American Customer Satisfaction Index) named Costco number one in the specialty retail store industry with a score of 83 in Q4 2008.
, Costco's board of directors is chaired by co-founder Jeffrey H. Brotman and includes three officers of the company: CEO/co-founder James D. Sinegal, President/COO W. Craig Jelinek, and CFO Richard A. Galanti. There are also eleven independent directors:
Hamilton E. James (the "Lead Independent Director"),
Benjamin S. Carson, Sr.
Ben Carson
Benjamin Solomon "Ben" Carson, Sr., M.D., is an American neurosurgeon and the Director of Pediatric Neurosurgery at Johns Hopkins Hospital. He was awarded the Presidential Medal of Freedom, the highest civilian award in the United States by President George W...
,
Susan Decker
Susan Decker
Susan Lynne Decker served as president of Yahoo! Inc in 2007 and 2008, leading the operations of the company during Jerry Yang's reign as CEO.-Early history and personal life:...
,
Richard D. DiCerchio,
Daniel J. Evans
Daniel J. Evans
Daniel Jackson Evans served three terms as the 16th Governor of the state of Washington from 1965 to 1977, and represented the state in the United States Senate from 1983 to 1989....
,
William H. Gates, Sr.
William H. Gates, Sr.
William Henry Gates, Sr. is a retired American attorney and philanthropist and author of the book Showing Up for Life: Thoughts on the Gifts of a Lifetime. He is the father of Microsoft founder Bill Gates.-Life and career:Gates was born in Bremerton, Washington, to William Henry Gates I or Sr...
,
Richard M. Libenson,
John W. Meisenbach,
Charles T. Munger
Charlie Munger
Charles Thomas Munger is an American business magnate, lawyer, investor, and philanthropist. He is Vice-Chairman of Berkshire Hathaway Corporation, the diversified investment corporation chaired by Warren Buffett; in that capacity, Buffett describes Munger as "my partner." Munger is also the...
,
Jeff Raikes
Jeff Raikes
Jeffrey Scott "Jeff" Raikes is the chief executive officer of the Bill & Melinda Gates Foundation. Until early 2008 Raikes was the President of the Microsoft Business Division and oversaw the Information Worker, Server & Tools Business and Microsoft Business Solutions Groups...
, and
Jill Ruckelshaus.
In the United States, Costco is closed on seven holidays
Public holiday
A public holiday, national holiday or legal holiday is a holiday generally established by law and is usually a non-working day during the year....
:
New Year's Day,
Easter,
Memorial Day
Memorial Day
Memorial Day is a United States federal holiday observed on the last Monday of May. Formerly known as Decoration Day, it originated after the American Civil War to commemorate the fallen Union soldiers of the Civil War...
,
Independence Day
Independence Day (United States)
Independence Day, commonly known as the Fourth of July, is a federal holiday in the United States commemorating the adoption of the Declaration of Independence on July 4, 1776, declaring independence from the Kingdom of Great Britain...
,
Labor Day,
Thanksgiving
Thanksgiving
Thanksgiving Day is a holiday celebrated primarily in the United States and Canada. Thanksgiving is celebrated each year on the second Monday of October in Canada and on the fourth Thursday of November in the United States. In Canada, Thanksgiving falls on the same day as Columbus Day in the...
, and
Christmas.
Sales model
Costco focuses on selling products at low pricePrice
-Definition:In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.In modern economies, prices are generally expressed in units of some form of currency...
s, often at very high volume. These goods are usually bulk-packaged and marketed primarily to large families and businesses. Furthermore, Costco does not carry multiple brands or varieties where the item is essentially the same except when it has a house brand to sell, typically under the Kirkland Signature label. This results in a high volume of sales from a single vendor, allowing further reductions in price, and reducing marketing costs. If Costco management feels the wholesale price of a product is too high, they will refuse to stock the product. For example, on November 16, 2009, Costco announced that it would stop selling Coca-Cola
Coca-Cola
Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines in more than 200 countries. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke...
products due to the soft drink maker refusing to lower its wholesale prices.
Costco resumed selling Coca-Cola products on December 14, 2009. Costco also saves money by not stocking extra bags or packing materials; to carry out their goods, customers must bring their own bags or use the merchandise shipping boxes from the company's outside vendors.
Lighting costs are reduced on sunny days, as most Costco locations have several skylights. During the day, electronic light meters measure how much light is coming in the skylights and turn off an appropriate percentage of the interior lights. During a typical sunny day, it is very common for the center section of the warehouse to have no interior lights powered on.
Most products are delivered to the warehouse on shipping pallet
Pallet
A pallet , sometimes called a skid, is a flat transport structure that supports goods in a stable fashion while being lifted by a forklift, pallet jack, front loader or other jacking device. A pallet is the structural foundation of a unit load which allows handling and storage efficiencies...
s and these pallets are used to display products for sale on the warehouse floor
Floor
A floor is the walking surface of a room or vehicle. Floors vary from simple dirt in a cave to many-layered surfaces using modern technology...
. This contrasts with retail stores that break down pallets and stock individual products on shelves. Costco limits its price markup on items to 15%.
Membership
Costco is only open to members and their guests, except for purchases of liquorDistilled beverage
A distilled beverage, liquor, or spirit is an alcoholic beverage containing ethanol that is produced by distilling ethanol produced by means of fermenting grain, fruit, or vegetables...
and gasoline in some US states because of state law
State law
In the United States, state law is the law of each separate U.S. state, as passed by the state legislature and adjudicated by state courts. It exists in parallel, and sometimes in conflict with, United States federal law. These disputes are often resolved by the federal courts.-See also:*List of U.S...
s; and prescription drug
Prescription drug
A prescription medication is a licensed medicine that is regulated by legislation to require a medical prescription before it can be obtained. The term is used to distinguish it from over-the-counter drugs which can be obtained without a prescription...
s because of federal law. Memberships must be purchased in advance for one year (as of May 5, 2007). Purchases made at Costco's website do not require a membership; however, a 5% surcharge
Fee
A fee is the price one pays as remuneration for services. Fees usually allow for overhead, wages, costs, and markup.Traditionally, professionals in Great Britain received a fee in contradistinction to a payment, salary, or wage, and would often use guineas rather than pounds as units of account...
is added to purchases made by non-members. Purchases made with Costco Cash Cards also do not require a membership, and there is no surcharge. Canadian and United States Costco locations only accept American Express
American Express
American Express Company or AmEx, is an American multinational financial services corporation headquartered in Three World Financial Center, Manhattan, New York City, New York, United States. Founded in 1850, it is one of the 30 components of the Dow Jones Industrial Average. The company is best...
, PIN-based debit card
Debit card
A debit card is a plastic card that provides the cardholder electronic access to his or her bank account/s at a financial institution...
s (Interac
Interac
Interac Association is a Canadian organization linking enterprises that have proprietary networks so that they may communicate with each other for the purpose of exchanging electronic financial transactions. The Association was founded in 1984 as a cooperative venture between five financial...
in Canada), cash, checks, and now EBT cards (food stamps). While Costco welcomes members to bring up to two guests, only the members may pay for items. American Express
American Express
American Express Company or AmEx, is an American multinational financial services corporation headquartered in Three World Financial Center, Manhattan, New York City, New York, United States. Founded in 1850, it is one of the 30 components of the Dow Jones Industrial Average. The company is best...
is the only accepted credit card (in the United States, Canada, and Japan) because they charge Costco very low interchange fees (a percentage of revenue from total sales made); as Costco's margins are low in comparison to other retailers. Costco accepts Flexible Spending Account
Flexible spending account
A flexible spending account , also known as a flexible spending arrangement, is one of a number of tax-advantaged financial accounts that can be set up through a cafeteria plan of an employer in the United States...
(FSA) debit cards for qualifying purchases at the pharmacy and optical departments in the US. Costco.com accepts the American Express, Visa, MasterCard, and Discover cards. The website also accepts Bill Me Later accounts for payment.
membership fees at Costco are $55 per year for a Gold Star (individual) or Business membership, which can be upgraded to Executive membership for an additional $55 per year. Along with the additional benefits the executive membership offers (e.g. car purchasing savings, home loans, car insurance, check printing services) Executive members also receive an annual "2% Rewards Check" of up to $750.00 from Costco on all purchases made, excluding select items such as gasoline, tobacco, stamps and in some states, alcohol.
In Canada, membership is CDN
Canadian dollar
The Canadian dollar is the currency of Canada. As of 2007, the Canadian dollar is the 7th most traded currency in the world. It is abbreviated with the dollar sign $, or C$ to distinguish it from other dollar-denominated currencies...
$55.00 a year for a Gold Star membership and includes a card for a spouse, or CDN
Canadian dollar
The Canadian dollar is the currency of Canada. As of 2007, the Canadian dollar is the 7th most traded currency in the world. It is abbreviated with the dollar sign $, or C$ to distinguish it from other dollar-denominated currencies...
$100.00 a year for an Executive membership.
In the United Kingdom, membership is restricted to certain groups only. A Trade membership is available to qualified professionals such as a pilot, solicitor, magistrate or banker for £20.00 (plus VAT
Vat
Vat or VAT may refer to:* A type of container such as a barrel, storage tank, or tub, often constructed of welded sheet stainless steel, and used for holding, storing, and processing liquids such as milk, wine, and beer...
), which includes a card for a spouse. Public-sector workers (NHS, education, emergency services, local government) may apply for an individual membership, which costs £25. It should be noted that a Costco card issued an another country is valid in the U.K., and as such, it would be possible for a U.K. resident to sign up elsewhere and use their card at home without meeting U.K. membership requirements.
In Australia, membership is A$
Australian dollar
The Australian dollar is the currency of the Commonwealth of Australia, including Christmas Island, Cocos Islands, and Norfolk Island, as well as the independent Pacific Island states of Kiribati, Nauru and Tuvalu...
55.00 a year for a business membership, or A$
Australian dollar
The Australian dollar is the currency of the Commonwealth of Australia, including Christmas Island, Cocos Islands, and Norfolk Island, as well as the independent Pacific Island states of Kiribati, Nauru and Tuvalu...
60.00 a year for a Gold Star membership.
In Mexico, membership is MXN
Mexican peso
The peso is the currency of Mexico. Modern peso and dollar currencies have a common origin in the 15th–19th century Spanish dollar, most continuing to use its sign, "$". The Mexican peso is the 12th most traded currency in the world, the third most traded in the Americas, and by far the most...
$400.00 a year for a Gold Star membership, or MXN
Mexican peso
The peso is the currency of Mexico. Modern peso and dollar currencies have a common origin in the 15th–19th century Spanish dollar, most continuing to use its sign, "$". The Mexican peso is the 12th most traded currency in the world, the third most traded in the Americas, and by far the most...
$1000.00 a year for an Executive membership. Costco is only open to members for all services and purchases. Mexican locations only accept cash and Visa Electron debit cards; purchases with Mastercard or Visa credit cards have a surcharge of approximately 4%. Purchases with the Mexican Costco credit card keep cash prices.
Policies
Return policy
Costco memberships can be refunded in full at any time before they expire. Costco guarantees almost all of their products with a full refund within a reasonable amount of time. Exceptions include televisions, projectors, computers, cameras, camcorders, digital audio players, and cellular phones; these may be returned within 90 days of purchase for any reason for a refund. After 90 days those returns must be done through the manufacturer according to the terms of the warranty. Costco has negotiated with manufacturers to extend the manufacturers warranty to two years for new TVs and computers (five years on TV's sold by Costco in the UK). Costco also offers a free "concierge" service to members who purchase electronics, to help answer questions regarding setup and use and avoid potential returns due to not understanding how to use the products.Food stamps in the U.S.
Until 2009, Costco did not accept food stampsFood Stamp Program
The United States Supplemental Nutrition Assistance Program , historically and commonly known as the Food Stamp Program, is a federal-assistance program that provides assistance to low- and no-income people and families living in the U.S. Though the program is administered by the U.S. Department of...
. As of March 14, 2009, an article in the Pittsburgh Post-Gazette
Pittsburgh Post-Gazette
The Pittsburgh Post-Gazette, also known simply as the "PG," is the largest daily newspaper serving metropolitan Pittsburgh, Pennsylvania, USA.-Early history:...
quoted Jim Sinegal, co-founder and president of the company, as saying, "Generally we don't have customers who use food stamps."
In response to the poor economy, as well as competitor BJ's Wholesale Club
BJ's Wholesale Club
BJ's Wholesale Club, Inc. , commonly referred to simply as BJ's, is a membership-only warehouse club chain operating on the United States East Coast, as well as in the state of Ohio...
's decision in April to accept electronic food-stamp benefits chainwide, Costco announced in May 2009 that it will accept food stamps on a trial basis in two New York City stores starting in June 2009 and depending on its success, might expand it to all New York City stores. The company subsequently announced plans to expand the program beyond New York City, targeting first the "hard-hit areas like Michigan
Michigan
Michigan is a U.S. state located in the Great Lakes Region of the United States of America. The name Michigan is the French form of the Ojibwa word mishigamaa, meaning "large water" or "large lake"....
and the central valley of California", expanding to "half its roughly 410 U.S. stores by Thanksgiving
Thanksgiving
Thanksgiving Day is a holiday celebrated primarily in the United States and Canada. Thanksgiving is celebrated each year on the second Monday of October in Canada and on the fourth Thursday of November in the United States. In Canada, Thanksgiving falls on the same day as Columbus Day in the...
", and then going nationwide.
Cash Cards
Costco Cash Cards can be purchased in the warehouse and members can load them with money to make non-cash purchases at all Costco warehouses in the United States and Australia. Because Costco gas stations take only Costco Cash, debit cardDebit card
A debit card is a plastic card that provides the cardholder electronic access to his or her bank account/s at a financial institution...
s, and American Express
American Express
American Express Company or AmEx, is an American multinational financial services corporation headquartered in Three World Financial Center, Manhattan, New York City, New York, United States. Founded in 1850, it is one of the 30 components of the Dow Jones Industrial Average. The company is best...
, people who can only pay for gas by check or cash must purchase a Costco Cash Card inside the building before filling up. A Costco Membership is not required to purchase an in-store item with a Costco Cash Card. A non-member may not purchase or re-load a Costco Cash Card; however, they may spend more than the total value of their cash card provided they pay in cash or approved debit cards for the remaining balance.
Products
Over the years, Costco has gradually expanded its range of products and services. Initially it preferred to sell only boxed products that could be dispensed by simply tearing the shrinkwrap off a pallet. It now sells many other products that are more difficult to handle, such as fresh produceProduce
Produce is a generalized term for a group of farm-produced goods and, not limited to fruits and vegetables . More specifically, the term "produce" often implies that the products are fresh and generally in the same state as where they were harvested. In supermarkets the term is also used to refer...
, meat, dairy, seafood, fresh baked goods
Baking
Baking is the technique of prolonged cooking of food by dry heat acting by convection, and not by radiation, normally in an oven, but also in hot ashes, or on hot stones. It is primarily used for the preparation of bread, cakes, pastries and pies, tarts, quiches, cookies and crackers. Such items...
, flowers, clothing, books, computer software, vacuum
Vacuum
In everyday usage, vacuum is a volume of space that is essentially empty of matter, such that its gaseous pressure is much less than atmospheric pressure. The word comes from the Latin term for "empty". A perfect vacuum would be one with no particles in it at all, which is impossible to achieve in...
s, Home appliance
Home appliance
Home appliances are electrical/mechanical machines which accomplish some household functions, such as cooking or cleaning. Home appliances can be classified into:*Major appliances, or White goods*Small appliances, or Brown goods...
s, home electronics
Electronics
Electronics is the branch of science, engineering and technology that deals with electrical circuits involving active electrical components such as vacuum tubes, transistors, diodes and integrated circuits, and associated passive interconnection technologies...
, solar panels, jewelry
Jewellery
Jewellery or jewelry is a form of personal adornment, such as brooches, rings, necklaces, earrings, and bracelets.With some exceptions, such as medical alert bracelets or military dog tags, jewellery normally differs from other items of personal adornment in that it has no other purpose than to...
, tires, art, fine wine, hot tub
Hot tub
A hot tub is a large tub or small pool full of heated water and used for soaking, relaxation, massage, or hydrotherapy. In most cases, they have jets for massage purposes. Hot tubs are usually located outdoors, and are often sheltered for protection from the elements, as well as for privacy....
s, furniture and caskets. Many warehouses have tire garages
Automobile repair shop
An automobile repair shop is a place where automobiles are repaired by auto mechanics and electricians.- Types :The automotive garage can be divided in so many category....
, pharmacies
Pharmacy
Pharmacy is the health profession that links the health sciences with the chemical sciences and it is charged with ensuring the safe and effective use of pharmaceutical drugs...
, hearing aid
Hearing aid
A hearing aid is an electroacoustic device which typically fits in or behind the wearer's ear, and is designed to amplify and modulate sound for the wearer. Earlier devices, known as "ear trumpets" or "ear horns", were passive funnel-like amplification cones designed to gather sound energy and...
centers, optometrists
Optometry
Optometry is a health care profession concerned with eyes and related structures, as well as vision, visual systems, and vision information processing in humans. Optometrists, or Doctors of Optometry, are state licensed medical professionals trained to prescribe and fit lenses to improve vision,...
, photo processors
Photographic processing
Photographic processing is the chemical means by which photographic film and paper is treated after photographic exposure to produce a negative or positive image...
, and gas stations
Filling station
A filling station, also known as a fueling station, garage, gasbar , gas station , petrol bunk , petrol pump , petrol garage, petrol kiosk , petrol station "'servo"' in Australia or service station, is a facility which sells fuel and lubricants...
. Optometrists working at Costco locations will see patients without Costco memberships.
Costco Optical ranks as the fourth-largest optical company in the US. A membership is required to fill a prescription at the optical department.
Some locations have liquor stores, often kept separate from the main warehouse in order to comply with liquor license
Liquor license
-Alberta:In Alberta, liquor licences are issued by the Alberta Gaming and Liquor Commission.-United Kingdom:Throughout the United Kingdom, the sale of alcohol is restricted—pubs, restaurants, shops and other premises must be licensed by the local authority. The individual responsible for the...
restrictions. In some states (such as Texas), the liquor store must be owned and operated by a separate company with separate employees. In 2006, Costco lost a lawsuit against the state of Washington in which it was seeking to purchase wine directly from the producer, bypassing the state retail monopoly
Alcoholic beverage control state
Alcoholic beverage control states, generally called control states, are those in the United States that have state monopoly over the wholesaling and/or retailing of some or all categories of alcoholic beverages, such as beer, wine, and distilled spirits....
. In Australia, Costco has to comply with regulations set by each state they choose trade in; their first store in the state of Victoria benefits from some of the most liberal alcohol licensing laws in the country, with retailers permitted to sell alcohol on shelves within the store, in a manner similar to most European countries, yet they have chosen to have a separate checkout within the liquor section.
Kirkland Signature
Store brand
Store brands are a line of products sold by a retailer under a single marketing identity. They bear a similarity to the concept of House brands, Private label brands in the United States, own brands in the UK, and home brands in Australia and generic brands...
, otherwise known in the retail industry as an "own-brand," "house brand" or "private label
Private label
Private label products or services are typically those manufactured or provided by one company for offer under another company's brand. Private label goods and services are available in a wide range of industries from food to cosmetics to web hosting...
." It is found exclusively at Costco's website and Costco warehouses and is trademarked by the company. The name derives from the fact that Costco's corporate headquarters was located in the city of Kirkland, Washington
Kirkland, Washington
Kirkland is a city in King County, Washington, United States. It is a suburb of Seattle on the Eastside . The population was 48,787 at the 2010 census makes it the 9th largest city in King County and the 20th largest city in the state...
between 1987 and 1996.
Costco introduced Kirkland Signature as its house brand in 1995. The idea was to identify categories in which a private label product could provide brand name quality at discounted prices.
To counteract the consumer confidence problem common in store branding, Kirkland Signature sometimes relies on co-branding
Co-branding
Co-branding refers to several different marketing arrangements:Co-branding, also called brand partnership, is when two companies form an alliance to work together, creating marketing synergy...
. According to Costco, while consumers may be wary of same-store-branding, they are less likely to be wary of brands that they are familiar with and trust.
Services
Costco acts as an investment broker and travel agentTravel agency
A travel agency is a retail business that sells travel related products and services to customers on behalf of suppliers such as airlines, car rentals, cruise lines, hotels, railways, sightseeing tours and package holidays that combine several products...
. They also have an auto buying program that offers prearranged pricing at specially selected dealerships. Costco members can use the auto program to purchase new and factory-certified pre-owned vehicles, boats, RVs and powersports. According to auto program advertisements, more than a million members have used program in the last five years. Costco has an agreement with Ameriprise
Ameriprise Financial
Ameriprise Financial, Inc. is one of the leading diversified financial services companies in the U.S. Ameriprise Financial engages in business through its...
for auto and home insurance. In 2004 Costco offered an original artwork by artist Pablo Picasso
Pablo Picasso
Pablo Diego José Francisco de Paula Juan Nepomuceno María de los Remedios Cipriano de la Santísima Trinidad Ruiz y Picasso known as Pablo Ruiz Picasso was a Spanish expatriate painter, sculptor, printmaker, ceramicist, and stage designer, one of the greatest and most influential artists of the...
on their online store; more recently a highly-regarded 1982 Mouton Rothschild
Château Mouton Rothschild
Château Mouton Rothschild is a wine estate located in the village of Pauillac in the Médoc, 50 km north-west of the city of Bordeaux, France. Its red wine of the same name is regarded as one of the world's greatest clarets. Originally known as Château Brane-Mouton it was renamed by Nathaniel...
wine was offered as well as other rare wines in rotation.
Costco Photo Center is a multi-functional photography printing lab offering services at the warehouses as well as through their web site, costcophotocenter.com. The website provides free unlimited digital file storage with a current membership. Previous to May or June 2010, Costco had an agreement with Mypublisher.com for custom book and calendar publishing. Now, they print the photobooks and calendars themselves.
Online shopping
The domain costco.com attracted at least 58 million visitors in 2008 according to a Compete.comCompete.com
Compete.com is a web traffic analysis service of Compete, Inc. which operates in the United States and publishes the approximate number of global visitors to the top 1,000,000 web sites in the world...
survey. Costco has three e-commerce websites including costco.com for the US market, costco.ca for Canada and costco.co.uk for the United Kingdom.
Costco Travel
Costco Travel is a wholly owned subsidiary of Costco Wholesale, and offers leisure travel to Costco members of the United States. The program was established in 2000 as a service to Costco members. Costco Travel’s offices are located in Issaquah, Washington, adjacent to Costco’s corporate headquarters. Costco Travel employs 290 travel professionals, all of whom are Costco employees.The program offers vacation packages to Hawaii, Mexico, the Caribbean, Europe, Orlando, the South Pacific, the Desert Southwest and Las Vegas. Other products include cruises, guided vacations, theme park packages, houseboat rentals, hotel-only lodging and luxury vacation rentals. Select products feature additional benefits for Costco Executive Members.
The program is marketed directly to Costco members through various Costco avenues, including the Travel Guide to Savings (found in all U.S. Costco warehouses), online in the Travel section of Costco.com, The Costco Connection magazine, weekly broadcast e-mails, direct mail pieces, multi-vendor coupon booklets, Costco warehouse road shows, and other exclusive Costco projects and events.
Food service
Most Costco locations have a food courtFood court
A food court is generally an indoor plaza or common area within a facility that is contiguous with the counters of multiple food vendors and provides a common area for self-serve dining. Food courts may be found in shopping malls and airports, and in various regions may be a standalone development...
, offering a quarter-pound 100% beef hot dog or polish sausage and 20 oz drink (with refill) for $1.50, the same price since 1985. In Australia the hot dog is made of pork and is sold at A$2.49 with large soda. In Canada the price for hot-dog and 20 oz pop drink with refill is 1.50 CAD In Mexico, the hot dog is made of pork, and includes a drink (with refill) for $25 MXN. In the UK, the hot dog is also made from beef and you also get a drink (with refill) for £1.50. Costco sold more than 82 million quarter-pound hot dogs in its food courts in 2008. Pizza is also available in most locations as cheese, pepperoni, veggie, or combo, and can be ordered to go at many locations. Frozen yogurt is also served in chocolate, vanilla, or swirled together. Also offered are berry smoothies, mocha latte freezes, chicken bake and their new Asada bake, sandwiches, turkey wraps, twisted churro
Churro
A churro, sometimes referred to as a Spanish doughnut, is a fried-dough pastry-based snack that has disputed origins. Churros are also popular in Latin America, France, Portugal, Morocco, the United States, Australia, and Spanish-speaking Caribbean islands. There are two types of churros in Spain....
s, chicken Caesar salads, and in some locations, gelato. French fries are also offered in some locations. Due to slow sales, the pretzel
Pretzel
A pretzel is a type of baked food made from dough in soft and hard varieties and savory or sweet flavors in a unique knot-like shape, originating in Europe...
was replaced by the churro. The nutrition data for the Costco Food Court items is posted online.
In April 2010, certain Costco warehouses in the U.S. and Canada replaced their Coca-Cola drink fountain selections with Pepsi, accompanied with a change in labels on the disposable cups.
Labor relations
While some former Price Club locations in California and the northeastern United States are staffed by TeamstersTeamsters
The International Brotherhood of Teamsters is a labor union in the United States and Canada. Formed in 1903 by the merger of several local and regional locals of teamsters, the union now represents a diverse membership of blue-collar and professional workers in both the public and private sectors....
, the majority of Costco locations are not unionized. The non-union locations have revisions to their Costco Employee Agreement every three years concurrent with union contract ratifications in locations with collective bargaining agreements. Similar to a union contract, the Employee Agreement sets forth such things as benefits, compensations, wages, disciplinary procedures, paid holidays, bonuses, and seniority. , non-supervisory hourly wages ranged from $11.00 to $21.00 in the United States, $11.00 to $22.15 in Canada, and £6.28 to £10.50 in the United Kingdom. In the US, eighty-five percent of Costco's workers have health insurance
Health insurance
Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care expenses among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is...
, compared with less than fifty percent at Walmart and Target.
Product-demonstration (e.g., food samples) employees work for an outside company. In the western U.S., the company is called Warehouse Demo Services, Kirkland, Washington. Costco also uses Club Demonstration Services, based in San Diego, California. In Canada, demonstrations are done exclusively by Professional Warehouse Demonstrations.
International
Warehouses outside the US are similar to those in the US. Layout, signage, and even parking lot markings are generally identical to warehouses in the US. Food court menus are tailored to international tastes, with poutinePoutine
Poutine is a Canadian dish of French fries and fresh cheese curds, covered with brown gravy or sauce. Sometimes additional ingredients are added.Poutine is a fast food dish that originated in Quebec and can now be found across Canada...
on offer in Canada, seafood-topped pizza available in Asian and Mexican locations, clam chowder in Japan, Taiwan & South Korea, jacket potatoes in the UK and meat pies in Australia. The merchandise mix available in warehouses is also tailored to local tastes, with a mix of both American and local products available.
Locations
, Costco has 572 warehouses:- 425 in the United StatesUnited StatesThe United States of America is a federal constitutional republic comprising fifty states and a federal district...
- 81 in Canada, the most locations per-capita in any country.
- 32 in Mexico (50–50 joint venture with Comercial MexicanaComercial MexicanaComercial Mexicana is a Mexican hypermarket group, which features stores similar to those owned by Carrefour in France or Wal-Mart in the United States...
) - 22 in the United Kingdom The latest to open is in CoventryCoventryCoventry is a city and metropolitan borough in the county of West Midlands in England. Coventry is the 9th largest city in England and the 11th largest in the United Kingdom. It is also the second largest city in the English Midlands, after Birmingham, with a population of 300,848, although...
- 9 in Japan (Tamasakai is currently closed pending earthquake damage checks)
- 7 in South Korea The latest to open is in Suyeong-gu, Busan
- 8 in TaiwanTaiwanTaiwan , also known, especially in the past, as Formosa , is the largest island of the same-named island group of East Asia in the western Pacific Ocean and located off the southeastern coast of mainland China. The island forms over 99% of the current territory of the Republic of China following...
- 4 in Puerto RicoPuerto RicoPuerto Rico , officially the Commonwealth of Puerto Rico , is an unincorporated territory of the United States, located in the northeastern Caribbean, east of the Dominican Republic and west of both the United States Virgin Islands and the British Virgin Islands.Puerto Rico comprises an...
- 3 in Australia (Melbourne, Sydney, and Canberra)
In 2005 the world's largest Costco was located in Hillsboro, Oregon
Hillsboro, Oregon
Hillsboro is the fifth-largest city in the U.S. state of Oregon and is the county seat of Washington County. Lying in the Tualatin Valley on the west side of the Portland metropolitan area, the city is home to many high-technology companies, such as Intel, that compose what has become known as the...
, U.S.
Other wholesale formats
Costco has experimented with other formats. Plans for Costco Fresh, a gourmet supermarket, were abandoned in February 2003. The membership-based format was to include a pharmacy, bakery, olive bar, deli, cafe, garden center and photo and optical departments, with products packaged in smaller quantities.Costco Business Center
Costco Business Centers carry restaurant, hospitality, janitorial, convenience store, and professional office supplies; items are offered in bulk or in smaller quantities, and selection for a given category of product is much broader. Delivery is available. Unlike traditional Costcos, clothing, sporting goods, jewelry, and optical products are among the items not available. A limited assortment of over-the-counter drugs and toiletries are sold, though there is no pharmacyPharmacy
Pharmacy is the health profession that links the health sciences with the chemical sciences and it is charged with ensuring the safe and effective use of pharmaceutical drugs...
. Some locations have a gas station and/or food court. All except San Diego have a Print & Copy Center.
As of September 2010, there are eight Costco Business Centers, located in California (Commerce
Commerce, California
Commerce is a city located in southeast Los Angeles County, California, United States. The population was 12,823 at the 2010 census, up from 12,568 at the 2000 census. It is bordered by Vernon on the west, Los Angeles on the northwest, East Los Angeles on the north, Montebello on the east, Downey...
, Hawthorne
Hawthorne, California
Hawthorne is a city in southwestern Los Angeles County, California. The city at the 2010 census had a population of 84,293, up from 84,112 at the 2000 census.-Geography:...
, Hayward
Hayward, California
Hayward is a city located in the East Bay in Alameda County, California. With a population of 144,186, Hayward is the sixth largest city in the San Francisco Bay Area and the third largest in Alameda County. Hayward was ranked as the 37th most populous municipality in California. It is included in...
, and San Diego), Washington (Lynnwood
Lynnwood, Washington
Lynnwood is a city in Snohomish County, Washington, United States. The population was 35,836 at the 2010 census, making it the fourth largest in Snohomish County and twenty-ninth largest in Washington State. The city is a mix of urban, suburban, small city, crossroads and bedroom community to many...
and Fife
Fife, Washington
Fife is a city in Pierce County, Washington, United States. The population was 9,173 at the 2010 census.-History:In 1940, it was described as "Fife...at a valley crossroads in the midst of a thickly settled berry growing and truck-gardening district is represented by a string of markets, taverns,...
),
Las Vegas, Nevada
Las Vegas, Nevada
Las Vegas is the most populous city in the U.S. state of Nevada and is also the county seat of Clark County, Nevada. Las Vegas is an internationally renowned major resort city for gambling, shopping, and fine dining. The city bills itself as The Entertainment Capital of the World, and is famous...
, and Phoenix, Arizona
Phoenix, Arizona
Phoenix is the capital, and largest city, of the U.S. state of Arizona, as well as the sixth most populated city in the United States. Phoenix is home to 1,445,632 people according to the official 2010 U.S. Census Bureau data...
.
Costco Home
The first Costco Home warehouse debuted in 2002 in Kirkland, Washington. The warehouse's concept was to combine the value, setting and members-only elements of Costco's warehouse clubs with the product array one would find at an upscale home store, such as FortunoffFortunoff
Fortunoff was a New York-based retailer of home, jewelry and furniture stores founded in 1922 by Max and Clara Fortunoff. The original Fortunoff store was on Livonia Avenue in Brooklyn, New York...
or Crate & Barrel. The Costco Home warehouses sold furniture, housewares, kitchen products and accessories from higher-end brands such as Lexington, Ralph Lauren
Polo Ralph Lauren
Ralph Lauren Corporation is a luxury clothing and goods company of the American fashion designer Ralph Lauren. Ralph Lauren specializes in high-end casual/semi-formal wear for men and women, as well as accessories, fragrances, home and housewares...
and Waterford in a warehouse-club setting. Costco claimed that, similar to its main warehouses, it accepted lower margins in return for greater volume with minimal overhead.
Over time, the concept was adjusted to include home electronics, some major appliances, office furniture, and a large selection of outdoor furniture and window treatments. Costco also partners with Glentel
Glentel
Glentel is the largest independent mobile phone retailer in Canada. The company has three operating divisions - Canadian Retail, American Retail, and a business division.-Retail Division:...
subsidiary WIRELESS etc. to sell mobile phones and plans in Canada and Wireless Advocates in the US.
On April 2, 2009, the company announced that it would be abandoning its Costco Home concept, closing the two existing stores in Kirkland, Washington and Tempe, Arizona on July 3, 2009, and abandoning plans for a third store on the West Coast. The company cited cutbacks in consumer spending on home products and its interest in focusing on its core business as the main reasons.