What makes Costco such a fascinating retailer?

This week we will take a deeper look into Costco. We explore 10 things that make Costco such a fascinating retailer, one of the most unique retailers in the world. Every day there will be two updates about different aspects of the company.

What is Costco?

Costco is a warehouse club retailer operating big warehouses that sell a variety of food and non-food products for a very low price. The low price is guaranteed by a membership model whereby customer can access the warehouses only if she has paid an annual membership fee to become a Costco customer.

Costco’s history can be traced back to the “father of the warehouse club model” Sol Price who started PriceClub in 1976. One of the employees of PriceClub, Jim Sinegal, went on to set up Costco. The first Costco warehouse opened in 1983 and in 1993 Costco and PriceClub merged.

Costco has been a fast growing success story from the start. According to its website, Costco became the fastest company to grow to three billion in sales. It took less than six years for Costco.

Costco’s business model is rather simple and it relies on efficient operations.

“Keep costs down and pass the savings on to our members. Our large membership base and tremendous buying power, combined with our never-ending quest for efficiency, result in the best possible prices for our members.”

— Costco

Steady growth over the years

With the warehouse model as well as with highly efficient and disciplined leadership, Costco has been able to grow steadily over the years without major crisis. The company has sustained quarterly revenue declines only during the 2008 & 2009 financial crisis.

For the last 15+ years Costco has been growing between 5-15% per quarter recording below 5% growth figures only occasionally.

Due to the disciplined and steady growth, Costco has climbed on the list of the world’s biggest retailers. In fact Costco has been the fastest climber on the list, besides Amazon.

Costco was world’s 9th biggest retailer in 2007 prior to the financial crisis. Today it is 3rd biggest.