For those of you that weren’t aware, Costco turns 26 today! So, in honor of Costco’s big day, I thought I’d post a few facts that you might not know about your favorite store.
- Costco was founded in Kirkland, Washington by James Sinegal and Jeffrey Brotman.
- They opened the first store in Seattle, Washington on September 15, 1983. (Just thinking about that makes me want to break out my leg warmers.)
- In 1993, Costco merged with Price Club (called Club Price in the Canadian province of Quebec). 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. The combined company was named PriceCostco (which doesn’t exactly roll off the tongue). (Dave used to actually be a Price Club member when he lived in Pasadena, California.)
- In 1997, they changed the name to Costco Wholesale.
- Costco is currently headquartered in Issaquah, Washington in the US. Canadian operations are headquartered in Ottawa, Ontario. And, the new Australian headquarters is located in North Ryde, New South Wales (even though their only store is in Victoria).
- Costco is the largest membership warehouse club chain in the world based on sales volume. And, they are the fifth largest general retailer in the United States.
- The main competitor in the membership warehouse space is Sam’s Club. Sam’s Club may have more warehouses than Costco, but Costco has higher total sales volume.
- For fiscal year 2008, which ended on August 31, 2008, Costco’s store sales totaled $71.0 billion. Costco’s net profit for 2008 was $1.3 billion.
- Costco became the first company ever to grow from zero to $3 billion in sales in less than six years.
- Across all 556 locations world-wide, Costco employs about 142,000 full- and part-time employees, including seasonal workers. The largest Costco is located in Hillsboro, Oregon.
- While some former Price Club locations in California and the northeastern United States are staffed by Teamsters, 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. In the US, eighty-five percent of Costco’s workers have health insurance, compared with less than half at Walmart and Target.
- As of March 2008, non-supervisory hourly wages range from $11.00 to $20.00 in the United States, $11.00 to $22.15 in Canada, and £6.28 to £10.00 in the United Kingdom.
- There are more than 57 million Costco members.
- The ACSI (The American Customer Satisfaction Index) named Costco number one in the retail industry with a score of 81 in 2006 and 2007 and a score of 83 in 2008. (Everyone loves Costco!)
- Currently membership fees at Costco are $50 per year for Goldstar and Business Memberships, which can be upgraded to Executive membership for an additional $50 per year. Along with the additional benefits the executive membership has, you also receive an annual “2% Rewards Check” of up to $500.00 from Costco on all purchases made (excluding select items such as gasoline, alcohol, and tobacco). In the UK, membership is £20.00 for Trade membership (plus VAT) which includes a card for a spouse. People who work for the National Health Service or any other government employee are entitled to an individual membership, which costs £25. In Australia, membership is AUD$50.00 a year for a business membership, or AUD$60.00 a year for a Goldstar membership.
- Costco is only open to members and their guests, except for purchases of liquor and gasoline in some U.S. states due to state law; and prescription drugs due to federal law.
- Memberships must be purchased in advance for one year (as of May 5, 2007). Costco memberships can be refunded in full at any time before they expire.
- Purchases made at Costco’s website do not require a membership; however, a 5% surcharge is added to purchases made by non-members.
- 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 high volume of sales from single vendor, allowing further reduction in price, and reducing marketing costs.
- 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. Kirkland Signature products are generally rated highly. Consumer reports have given high ratings for several products including batteries and laundry detergent. A number one rating was given to Kirkland Signature anodized cookware which sells for significantly less than some comparable products.
- Costco caps its profit margin on most products at 14% or 15%, but generally limits price markup on products from 8%-10%.
- American Express is the only accepted credit card (in the United States and Canada) because they charge Costco very low interchange fees (a percentage of revenue from total sales made). This is an unusual relationship for American Express, which typically charges higher fees to retailers than MasterCard or Visa. In the UK credit cards are not accepted at all, and customers must pay by cash or debit card.
- 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. (Good for your bank balance, and the environment.)
- Costco Optical ranks as the fourth-largest optical company in the US.
- Most Costco locations have either a food court or a hot dog cart. You can get a hot dog or Polish sausage, as well as pizza in most locations. You can also get frozen yogurt in chocolate or vanilla, very berry smoothies, mocha latte freeze, chicken bake sandwiches, & twisted churros. The churros replaced the pretzel because of slow sales.
- You can get a quarter-pound kosher hot dog or Polish sausage and 20 ounce drink (with free refill) for $1.50, the same price as when Costco opened in 1983 (and it is actually really tasty and a great lunch treat).
There you go, twenty-six facts for twenty-six years of great service and outstanding values. How can you not love Costco even more after reading some of these amazing facts and tidbits?
If you’re wondering where I got all of this handy and interesting information, I will admit it all came from Wikipedia. I do not have an encyclopedic knowledge of Costco’s history and statistics. That would just be crazy and weird.