20 Costco Facts Every Member Should Know

Welcome to WatchMojo, and today we're counting down interesting and little known facts about this giant multinational corporation.

#20: The Costco Connection Has a Massive Circulation

The monthly magazine The Costco Connection boasts a circulation that rivals some of the biggest publications in the United States, reaching over 14 million households and businesses in the U.S. alone. With editions in several countries, including Canada, the United Kingdom, Taiwan, Korea, Japan, Australia, and Mexico, it offers a mix of lifestyle and business articles, vendor stories, and member highlights, tailored to reflect the interests and needs of members in each locale. Far from being just a catalog, it's become a key way for Costco to maintain a unique relationship with its members, offering more than just sales pitches but a sense of community and shared values.

#19: The First Store Was a Converted Airplane Hangar

Unlike with some other big name companies, the history of Costco isn’t a tale that’s been drilled into the public consciousness. The earliest iteration of this business, “Price Club,” opened in 1976 and was the first store of its kind. The initial concept was to cater to small businesses, but the creators quickly realized that they could increase their profits exponentially by serving the general public as well. The first store was located on Morena Boulevard in San Diego, California in buildings that previously functioned as an airplane hangar. Stores today continue to be modeled in the same fashion, albeit in traditional warehouses without the high-flying legacy.

#18: Kirkland Products Are Named After a Real Place

It’s not some random focus group corporate name. The Kirkland Signature brand, Costco's in-house label, draws its name from the city of Kirkland, Washington, where Costco's first headquarters were situated. Introduced in 1995, this brand emerged with the goal of delivering products that matched or exceeded the quality of national brands but at more affordable prices. The choice of Kirkland as the brand name pays homage to Costco's origins and underscores the company's deep roots in the local community. The success of the Kirkland Signature brand reflects Costco's ability to leverage its massive buying power to secure favorable deals from suppliers, which in turn benefits its members.

#17: The Hot Dog Combo Hasn’t Changed Price Since 1985

Hungry while shopping? Costco has a plan for that. The chain’s famous hot dog and soda combo has remained $1.50 since its introduction in 1985. Despite inflation and rising costs, Costco has maintained this price, reflecting a commitment to value for its members. The hot dog stand, more than just a part of the food court, illustrates Costco's approach to balancing cost and member benefits. This decision to keep the price unchanged over decades is a notable aspect of Costco's strategy, highlighting a focus on affordability and consistency. It underscores the retailer's effort to offer value, while also drawing attention to the challenges of sustaining such pricing policies in the face of economic changes.

#16: It’s One of the Largest Pizza Chains in the US

And it’s not just hot dogs. Surprisingly, Costco is ranked as one of the largest pizza chains in the United States, outpacing many well-known brands in terms of the volume of pizzas sold. This success is attributed to generous portion sizes, competitive pricing, and the convenience of grabbing a quick, tasty meal while shopping. Costco's approach to pizza sales emphasizes value and accessibility, making it a go-to option for families and individuals alike. The pizza's reputation for being both delicious and affordable has definitely contributed to its standing as a formidable player in the U.S. pizza market, demonstrating Costco's unique position in the food service industry.

#15: It Built a Poultry Complex

To ensure a steady supply of chicken for their rotisserie chickens, which are famously priced at just $4.99, Costco built its own poultry complex in Nebraska. This move into vertical integration allows Costco to control costs, highlighting their commitment to supply chain control. By managing the production process from feed to finished product, Costco can mitigate the impact of market fluctuations on supply. This strategic investment not only secures a consistent supply of poultry for their stores but also reflects Costco's broader strategy to manage key aspects of their supply chain internally. It’s important to note that Costco has been accused of violating animal welfare laws in raising its chickens, including in a shareholder lawsuit filed in 2022.

#14: It’s Considered a Quality Employer

Costco stands out in the retail industry for its relative commitment to employee welfare, offering some of the better wages, benefits, and working conditions in the sector. Seeming to recognize that happier employees are crucial to providing high-quality customer service, Costco offers competitive salaries, comprehensive health benefits, retirement options, and opportunities for career advancement. This investment in its workforce has not only led to lower employee turnover rates but also fostered a positive and productive work environment. Costco's approach to employee management is often held up as a model for the retail industry, demonstrating that prioritizing employee satisfaction can lead to greater business success and customer loyalty.

#13: It Dominates the Organic Products Market

Contrary to what some might expect, Costco has emerged as one of the largest sellers of organic products, outpacing specialty retailers like Whole Foods. The company's commitment to offering a wide variety of organic options at competitive prices reflects its responsiveness to consumer trends and addressing demands for healthier, more sustainable food choices. Again, unsurprisingly, Costco's success in the organic market is attributed to its ability to leverage its buying power to secure favorable deals from suppliers, passing on some of the savings to its members. This emphasis on organic products not only caters to the growing consumer preference for organic foods but also aligns with Costco's broader aspirations to sustainability and quality.

#12: The Impact of the Membership Model

Costco's membership model was a revolutionary concept that transformed the retail landscape. By requiring customers to purchase memberships to shop in their warehouses, Costco created a sense of exclusivity and loyalty that has been integral to its success. This model allows Costco to keep prices low by operating at a lower overhead compared to traditional retailers and focusing on a curated selection of high-volume, high-value items. The membership model has not only fueled Costco's growth but also fostered a strong community of dedicated shoppers who crave the value and quality that Costco is seen as offering. This innovative approach to retail proved to be a game-changer, setting Costco apart from its competitors and establishing it as an early leader in the now-competitive warehouse club sector.

#11: It Takes Book Selection Seriously

Want something good to read as you enjoy some pizza or hot dogs? Costco's book section might come as a surprise to those who view it merely as a destination for bulk goods. This section offers a curated collection of current bestsellers, children's books, cookbooks, and more, often at discounted prices. Costco's approach to book retailing is geared towards members discovering new reads — and gift ideas — while shopping for their everyday needs. The book selection process emphasizes recent popular and critically acclaimed titles, making it easier for browsing customers to find higher-quality reads without needing to sift through an overwhelming amount of options.

#10: It’s a Travel Booking Giant

Beyond its vast selection of goods, Costco has quietly positioned itself as a powerhouse in the travel industry through its Costco Travel services. Offering exclusive travel deals to its members, Costco Travel provides significant savings on vacation packages, cruises, rental cars, and more. Another instance of market domination yielding potential savings, members can choose package deals that often include added perks such as resort credits and room upgrades. The focus is largely on making luxury travel more accessible. The success of Costco Travel underscores the company's ability to leverage its buying power across different industries, further enhancing the value of a Costco membership.

#9: It’s Also a Leader in the Wine Industry

While Costco doesn’t sell alcohol in all countries where it operates, Costco has, incredibly, become the largest wine retailer in the United States. It sends wine buyers to travel the world, looking for quality deals, as the company's strategy focuses on a curated selection of high-quality wines at competitive prices, ranging from affordable bottles to more high-end vintages. Of course, wine snobs or status-seekers turn up their noses but this lucrative focus on wine retailing has not only democratized access to quality wines but also educated consumers, making Costco an actual destination for a large population of wine enthusiasts.

#8: The Strategic Role of Its Free Sample Program

Everybody loves free stuff. But Costco's free sample program is more than just a popular perk for shoppers; it plays a strategic role in the company's marketing and sales strategies. By offering samples of products throughout the store, Costco not only enhances the shopping experience but also directly influences purchasing decisions. Beyond driving sales, the free sample program serves as a valuable feedback mechanism for Costco and its suppliers. Sampling provides immediate consumer reactions to new products, which can inform inventory decisions and supplier adjustments. This direct interaction between customers and products helps Costco maintain a dynamic and responsive product offering that aligns with emerging trends.

#7: The Power of the $4.99 Rotisserie Chicken

The cluck stops here. We already discussed the controversial infrastructure behind poultry processing, but it’s important to discuss the actual product that demanded such an intensive investment. The $4.99 rotisserie chicken, like a $1.50 hot dog, is more than just a popular product; it's an item that exemplifies Costco's business strategy. Despite inflation and rising costs, Costco has maintained the price of its rotisserie chickens for years, using it as a loss leader to drive traffic and membership loyalty. The decision to keep the price stable, even at a loss, underscores how the concept of getting a great deal has become synonymous with Costco's brand, even if the extreme discount on rotisserie chickens is quite different from the pricing on other products.

#6: Private Jets

In January 2021, Costco entered a unique partnership with Wheels Up, a private aviation company, offering its members an exclusive one-year private jet membership costing over $17,000. This membership aimed to make private flying more accessible, featuring benefits such as a $3,500 Costco Shop Card and $4,000 in flight credits. Members could book flights with Wheels Up's fleet of over 300 planes and access to more than 1,250 partner aircraft. The membership also included additional perks like a one-year Inspirato luxury vacation rental subscription. However, the membership fee did not cover the actual flight costs, emphasizing a pay-as-you-go model for booking flights​.

#5: Quality Over Quantity

Sometimes less can be more, at least according to the strategic planners who developed Costco’s business philosophy. The company’s strategic product selection process, characterized by a limited number of products is designed to simplify shopping and enhance value. By offering a curated selection of higher-quality items in bulk quantities, Costco ensures that members have access to a selected basket of products that streamlines the shopping experience. But crucially for Costco’s profitability, this approach also strengthens Costco's negotiating power with suppliers, allowing for significant cost savings that are passed on to members. The company's focus on quality over quantity distinguishes it from most competitors.

#4: Return Policy

Costco's return policy is legendary among retailers for its simplicity. Members can return almost any product at any time if they are not satisfied, a policy that underscores Costco's commitment to customer satisfaction and trust. This hassle-free return policy builds loyalty and confidence among members, reinforcing the perception of Costco as a retailer that stands behind the quality of its products. While such a liberal return policy could be seen as risky, Costco's experience shows that it engenders member loyalty, which in turn drives repeat business and positive word-of-mouth.

#3: It’s All About Rotation

Another important inventory strategy that Costco implements is a dynamic rotation of products, especially when it comes to seasonal goods. This approach ensures that the warehouses are always stocked with fresh, timely items. This strategic rotation not only keeps the shopping experience exciting and varied but also allows Costco to manage its inventory efficiently, minimizing waste and optimizing sales. But here’s the potential downside — it also means that, because of the ruthless focus on limited selection, if you miss out on something that you really want that isn’t perceived to be in season, you have to wait until next year — if it’s restocked at all.

#2: Global Expansion & Local Adaptation

The company’s approach to global expansion reflects its capacity to adjust to different market environments while preserving the essence of its business model. Operating warehouses in countries such as Mexico, Japan, South Korea and Australia, the company customizes its inventory to align with the local tastes and preferences, indicating an understanding of varied consumer behaviors across regions. This strategy of localization has facilitated Costco's entry into markets that have diverse cultural and economic characteristics. In doing so, Costco's presence in international locations often introduces the concept of warehouse shopping to new demographics.

#1: Checking In

Costco's policy of checking receipts at the exit can sometimes lead to feelings of inconvenience or hassle among customers. This practice, aimed at ensuring the accuracy of transactions and preventing loss through theft or cashier errors, involves a staff member reviewing the items in a shopper's cart against the receipt. While intended as a security measure and a way to keep costs down by minimizing losses, some shoppers question its necessity, feeling it implies a lack of trust. The procedure, though quick, can cause delays during peak shopping times, adding to the frustration. This aspect of Costco's operational strategy, while practical from a business standpoint, sparks mixed reactions from its members, with some accepting it as part of the shopping experience and others viewing it as an unwelcome scrutiny.


What do you like — or dislike — about Costco? Let us know in the comments!