- Costco Heritage
Costco, one of the world’s largest global retailers, is a multi-billion dollar warehouse club with a selection of goods ranging from groceries to apparel. Currently, Costco has warehouse club operations in eight countries, with its two leading markets being the United States and Canada.
One of Costco’s missions is to bring “the best possible prices on quality brand-name merchandise” to their members. Not only does Costco provide goods in the form of food, apparel, technology, and lifestyle, but they also offer members the choice of speciality departments and exclusive member services, such as their pharmacy, automotive, gas, and liquor. Most notably are Costco’s $1.50 hotdog and soda food court combo.
Besides being known for its numerous stock keeping units (SKUs), Costco has also been renowned for being a great place to work. With a staggering 288,000 employees, Costco was ranked number 7 on Forbes annual ‘World’s Best Employers’ report. Some of the reasons why Costco is able to obtain such a high ranking are due in part to providing team members with multiple yearly bonuses, free executive membership, first dibs on hot-ticket items, and exclusive employee shopping hours.
The history of Costco starts in 1976 when it opened its first location’s doors in San Diego under the Price Club name. Initially, Costco only served small businesses, but quickly found that it could expand its offerings, and thus revenue, by catering to select non-business members. The first warehouse under the “Costco” brand name was opened in Seattle in 1983. Costco’s website likes to include that they were the “first company to grow from zero to $3 billion in sales in less than six years.”
Costco opened its first international location in Canada in 1985. By 1993, the Price Company and Costco merged to form PriceCostco, but later changed their name to Costco Companies, Inc., then to Costco Wholesale Corporation in 1999. In 2000, operating expenses for Costco led to a drop in net sales from $631 million to $602 million. In 2014, the company rebounded to become the 3rd largest retailer in the United States. As of 2019, Costco is ranked 14 by total revenue on the Fortune 500 list.
In recent years, Costco’s most iconic signature brand “Kirkland” is known to be America’s most beloved to some, and America’s weirdest private label to others. Regardless, an undeniable fact is that the Kirkland brand is an extreme success. In 2021, Kirkland brought in $58 billion in sales, which accounted for a quarter of the company’s total revenue, according to CNN. Not only is Kirkland a huge revenue driver for Costco, but it is actually “America’s biggest consumer packaged goods’ brand measured by sales”, even larger than Hershey and Kellog.
Costco Positioning:
How is the brand positioned? [If you can’t locate an explicit positioning statement in the materials you access, write one based on what you have found. Use the format presented in the Positioning lecture.]
Should address these questions:
- Who is targeted for brand use
- What goal does the brand help the consumer to achieve?
- Why Should the brand be chosen over competitors?