Costco outcompeted the big rivals

Written By Arhi Kivilahti

Costco has done it again, very strong growth (+16%) on top of record growth from last year (+21%). Since Q1/2020 Costco has grown a staggering +41%.

To put that in context, Amazon was able to grow it’s product sales by 35% on. a two year comparison basis!

The membership model really provides long term commitment

  • towards the customers in the form of lower prices: Gross margin down to 11,9% from 12,9% a year ago

  • from the customers: 90+% renewal rate and 9,2% growth for membership fees

This model combined with the very efficient assortment is one reason why Costco has been able to manage it’s inventories really well. The value of Merchandise inventories have gone up during the last 12 months. According to Costco, it is mainly due to the inflation. After all, inventories have not grown compared to revenue and inventory growth has not hindered profitability (net margin consistent to last year and up from Q1/2020).

Arhi Kivilahti
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