Today is a day to celebrate all things Costco! It’s Costco’s 31st birthday! In 1983, Costco opened their first location and they’ve been going strong ever since. So, in honor of Costco’s big day, I’ve got 31 fun facts that you may or may not know about everyone’s favourite store. Do you think they’re having a giant Costco Bakery cake for the big day?
- 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. What a feeling! (Yes, that is a Flashdance reference.)
- 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 be a Price Club member when he lived in Pasadena, California. When we moved to London we finally got rid of the last bunch of Q-Tips he bought there.]
- In 1997, they changed the name to Costco Companies, Inc. and rebranded all of their locations. Then, on August 30, 1999, Costco reincorporated in Washington (moving from a Delaware incorporation) and changed their name to Costco Wholesale Corporation.
- Costco trades on the NASDAQ Global Select Market under the symbol “COST”. They went public on December 5, 1985 at $10.00 per share (before stock splits); adjusting for stock splits, the initial price per share was approximately $1.67. They had a 2 for 1 split in May 1991, a 3 for 2 split March 1992, and another 2 for 1 split in January 2000. The closing price on September 12, 2014 was $125.37. Since the IPO the stock price (adjusted for splits) has increased by $123.70 per share or a whopping 7,507%! And that is just the change in stock price and doesn’t even begin to account for dividends.
- Costco has been paying a quarterly dividend since May 31, 2004, with an initial dividend of $0.10 per share. Their last quarterly dividend was paid on July 25, 2014 at $0.355 per share. In addition to the quarterly dividends they have had one special dividend of $7.00 per share paid on December 18, 2012. As of October 9, 2013, Costco had 8,198 stockholders of record.
- Costco is currently headquartered in Issaquah, Washington in the US. Canadian operations are headquartered in Ottawa, Ontario. The UK operations are headquartered in Watford, just outside of London, and where I currently do my shopping. Australian Costco headquarters is located in North Ryde, New South Wales. Costco’s Korean headquarters is located above their Gwangmyeong City location. Kanagawa is the headquarters of the Japanese Costco operations. The Taiwan headquarters is located in Neihu, Taipei. The headquarters for Costco Mexico is located in Huixquilucan. The new Spain operations are headquartered in Madrid, Spain (I think).
- As of today (September 15, 2014), Costco has a total of 663 warehouses: 468 locations in 43 US states and Puerto Rico, 88 locations in 9 Canadian provinces, 26 United Kingdom locations, 11 locations in South Korea, 10 locations in Taiwan (through a 55%-owned subsidiary), 20 locations in Japan, 6 Australian locations in 4 states, 33 warehouses in 18 Mexican states, and 1 location in Spain.
- Costco is the largest membership warehouse club chain in the world based on sales volume. They are the second largest general retailer in the United States as of July 2012, and the seventh largest retailer in the world. The main competitor in the membership warehouse space is Sam’s Club, though BJ’s Warehouse is also a strong competitor in certain markets. Sam’s Club has more warehouses than Costco, but Costco has a higher total sales volume.
- Costco became the first company ever to grow from zero to $3 billion in sales in less than six years. For fiscal year 2013, which ended on September 1, 2013, Costco’s net sales were $103 billion; a 6% increase. This represents the first time net sales exceeded $100 billion in the company’s history.
- The average size of a Costco warehouse is 143,000 square feet, with a range from 77,000 to 205,000 square feet. Newer locations are bigger with a size of 150,000 square foot. The largest Costco is located in Hillsboro, Oregon, as of 2005. Their average annual sales per warehouse increased to $160 million for FY2013. By the end of 2012, eight warehouses exceeded $300 million in annual sales.
- 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.) Also, Costco has placed rooftop solar photovoltaic systems on 60 of their buildings, which are projected to generate 55 million kWh of electricity per year.
- Across all locations world-wide, Costco employs about 184,000 workers: 103,000 full-time and 81,000 part-time employees, including seasonal workers (through end of financial year 2013). 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. Only 13,800 Costco employees at certain locations in five states are represented by the International Brotherhood of Teamsters. 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 2011, non-supervisory hourly wages range from $11.00 to $21.00 in the United States, $11.00 to $22.15 in Canada. In the UK, hourly employees range from a starting rate of £7.00 per hour, rising to £11.00 per hour and supervisory staff have starting salaries of £30,000pa.
- Costco usually limits marketing to new warehouse openings, occasional mailings to potential new members, and regular mailings to existing members, such as The Costco Connection, coupon mailers, and weekly email blasts from the websites in each several of the worldwide locations. This very targeted marketing approach results in lower marketing expenses when compared to other retailers.
- 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, however, a Costco memberships can be refunded in full at any time before they expire.
- There are more than 71 million Costco cardholders. The member renewal rate last year was 90% in the U.S. and Canada and 86% worldwide. Executive Members represent 38% of Costco’s members.
- In 2011, Costco increased membership fees for the first time in five years. Currently membership fees at Costco US are $55.00 per year for Goldstar and Business Memberships or Executive membership for $110.00 per year. Along with the additional benefits the executive membership has, you also receive an annual “2% Rewards Check” of up to $750.00 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, other government employers, or are employed in certain professions or industries are entitled to an individual membership, which costs £25.00. You can also get an Executive Membership in the UK for £55.00 (plus VAT). In Australia, membership is AUD$50.00 a year for a business membership, or AUD$60.00 a year for a Goldstar membership. In Canada, membership is CDN $55.00 a year for a Gold Star membership, or CDN $110.00 a year for an Executive membership. In Mexico, membership is MXN $450.00 a year for a Gold Star membership, or MXN $1000.00 a year for an Executive membership. In Spain, membership is €30.00 plus VAT a year for a Gold Star membership, or €25.00 plus VAT a year for a Business membership.
- Costco warehouses generally operate on a seven-day, 69-hour week, open weekdays between 10:00 am and 8:30 pm, with earlier weekend closing hours. Gasoline operations generally have extended hours. Costco locations outside of the US have varying hours but are also open 7 days a week, except in Korea where regulations require some locations to close on some Sundays.
- As of the end of 2013, Costco operated four ecommerce sites: Costco.com (US), Costco.ca (Canada), Costco.co.uk (UK), and Costco.com.mx (Mexico). Purchases made through Costco’s websites do not require a membership; however, a 5% surcharge is added to purchases made by non-members. In the UK you can get a special online subscription to make purchases online without the 5% surcharge for a yearly fee of £15.00. In 2013, the Costco online sites generated sales exceeding $3 billion.
- The ACSI (The American Customer Satisfaction Index) named Costco number one in the retail industry with a score of 81 in 2006 and 2007, a score of 83 in 2008, an 81 in 2009, an 82 in 2010, a score of 83 in 2011 and 2012, and an 84 in 2013. (Everyone loves Costco!)
- Costco caps its profit margin on most products at 14% or 15%, but generally limits price markup on products from 8%-10%.
- Costco does not carry multiple brands or varieties where the item is essentially the same except when it has a Kirkland Signature product, or a co-branded items. This results in high volume of sales from a single vendor, allowing further reduction in price, and reducing marketing costs. Costco carries an average of approximately 3,300 – 3,800 products per warehouse, as opposed to 45,000 to 140,000 products at other retailers or supermarkets.
- Costco introduced Kirkland Signature as its house brand in 1995. Items sold under the Kirkland Signature brand must meet or exceed the quality of the leading national brands, and must offer members the greatest value for their dollar. Kirkland Signature products are generally rated highly. Consumer Reports has 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. The Kirkland Signature products now represent 20% of the items Costco carries, but account for more than 20% of their sales dollars. Kirkland Signature items include: chocolate chips, organic canned tomato products, organic honey, coffee, olive oil, household cleaning products, a variety of wine and spirits, and several women’s and men’s clothing items.
- American Express is the only accepted credit card (in the US, UK, Japan, Korea, 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. If they don’t have an American Express, customers must pay by cash, check, or debit card.
- Since October 2007, Costco has been the largest retailer of fine wine in the world. In 2012, Costco pharmacies was a $4+ billion retail business. Also in 2012, Costco’s hearing aid center had $200 million in sales. In fiscal year 2010, Costco sold 84,000 carats of diamonds.
- Costco Optical ranks as the fourth-largest optical company in the US with sales of $900 million in 2012. And, you can use an FSA (flexible spending account) debit card to pay for your glasses. According to Consumer Reports: Costco Optical earned the highest score for overall satisfaction among chains, and also beat out most of its competitors for price—a pair of glasses cost a median of $157 compared with a median of $211 at independent optical shops and $212 at eye doctors’ offices.
- In 1995, Costco opened their first gas station at their Tucson location (just a couple of years before we moved there and I fell in love with Costco). In 2012, gasoline sales were up nearly 20%, for a total of more than $10 billion, or nearly three billion gallons of gasoline.
- In 2000, Costco started their Costco Travel business. By 2005, over 57,000 vacation packages had been booked through Costco Travel. Costco Travel is currently located in Issaquah, Washington and has around 300 employees. You can make reservations either by calling them or through their CostcoTravel.com website.
- Most Costco locations have a food court. 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, turkey wraps, chicken Caesar salads, twisted churros, and some locations now offer gelato. You can get a quarter-pound hot dog or Polish sausage and 20 ounce drink (with free refill) for $1.50 in the US, the same price as when Costco opened their first hot dog cart in 1985 (and it is actually really tasty and a great lunch treat). In Australia the hot dog is made of beef and is sold at A$1.99 with large soda. 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. In Canada, the price is also $1.50 CAD. Costco sold 91 million hot dog and soda meals in its food courts in 2009. Starting in April 2013, Pepsi replaced Coke in the Costco food court. The international location food courts all have items that cater to the local tastes but the hot dog and drink is offered at all locations and is very popular across all world-wide locations.
- This is the third Costco birthday since Craig Jelinek has assumed the roles of President and CEO at the beginning of 2012. Jim Sinegal, co-founder and former CEO, continues to act as a board member, he also acted as an advisor through February 2013. Jeffrey Brotman, co-founder, is the current Chairman.
Happy Birthday, Costco!
Thirty-one facts for thirty-one years of great service, outstanding values, and interesting shopping. How can you not love Costco even more after reading some of these amazing facts and tidbits?
By the way, if you’re wondering where I got all of this fascinating information, I will admit it all came from Costco with a bit of help from Wikipedia. I do not have an encyclopedic knowledge of Costco’s history and statistics. That would just be crazy and weird. I am also somewhat re-posting this from previous years, with up to date information though.