Company Profile
Costco Wholesale
Company Overview
December 2024
Costco Wholesale Corporation operates an international chain of membership warehouses, mainly under the "Costco Wholesale" name, that carry quality, brand-name merchandise at substantially lower prices than are typically found at conventional wholesale or retail sources. The warehouses are designed to help small- to medium-sized businesses reduce costs in purchasing for resale and for everyday business use. Individuals also may purchase for their personal needs.
Costco warehouses present one of the largest and most exclusive product category selections to be found under a single roof. Categories include groceries, candy, appliances, television and media, automotive supplies, tires, toys, hardware, sporting goods, jewelry, watches, cameras, books, housewares, apparel, health and beauty aids, furniture, office supplies and office equipment. Costco is known for carrying top-quality national and regional brands, with a 100% satisfaction guarantee.
Members also can shop for private label Kirkland Signature™ products, designed to be of equal or better quality than national brands, including juice, cookies, coffee, housewares, luggage, clothing and detergent. The Company also operates self-service gasoline stations at a number of its U.S., Canada, Australia, Japan, United Kingdom, Spain, Mexico, Taiwan, and Iceland locations.
Additionally, Costco Wholesale Industries, a division of the Company, operates manufacturing businesses, including special food packaging, optical laboratories, meat processing and jewelry distribution. These businesses have a common goal of providing members with high quality products at substantially lower prices.
According to Craig Jelinek, the Company's director and former CEO, "Costco is able to offer lower prices and better values by eliminating virtually all the frills and costs historically associated with conventional wholesalers and retailers, including salespeople, fancy buildings, delivery, billing and accounts receivable. We run a tight operation with extremely low overhead which enables us to pass dramatic savings to our members."
Costco is open only to members and offers three types of membership: Executive, Business and Gold Star. Executive Members receive additional savings on Costco Services such as auto and home insurance, Costco Auto Program, check printing, identity protection, payment processing and bottled water delivery. Executive Members in the U.S earn an annual 2% Reward (up to $1,250) on qualified Costco purchases. (Terms, conditions and exclusions apply. See the membership counter for details.) All types of membership include one free Household Card. Costco membership cards are accepted at Costco locations worldwide and online at Costco.com.
Business Members qualify by owning or operating a business, and pay an annual fee ($65 in the U.S.) to shop for resale, business and personal use. This fee includes one free Household Card. Business Members may purchase additional membership cards ($65 each) for partners or associates in the business.
Gold Star Members pay a $65 annual fee (in the U.S.), to shop for personal use. Individuals who don’t own a business may sign up for a Gold Star Membership. This fee includes one free Household Card.
Costco warehouses generally are open seven days a week for all members.
Costco is a Washington corporation, publicly traded under the Nasdaq ticker symbol "COST", with its home office in Issaquah, Washington.
Costco's fiscal year ends on the Sunday closest to August 31st.
A more complete description of the Company and its business is contained in the Company's periodic filings with the Securities and Exchange Commission.
Company History
The company's first location, opened in 1976 under the Price Club name, was in a converted airplane hangar on Morena Boulevard in San Diego. Originally serving only small businesses, the company found it could achieve far greater buying clout by also serving a selected audience of non-business members. With that change, the growth of the warehouse club industry was off and running. In 1983, the first Costco warehouse location was opened in Seattle. Costco became the first company ever to grow from zero to $3 billion in sales in less than six years. When Costco and Price Club merged in 1993, the combined company, operating under the name PriceCostco, had 206 locations generating $16 billion in annual sales.
Our operating philosophy has been simple. 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. Since resuming the Costco name in 1997, the company has continued to grow worldwide.
Costco has transformed the retail world. When entrepreneur Sol Price introduced a groundbreaking retail concept in San Diego, California. Price Club was the world's first membership warehouse club, a place where efficient buying and operating practices gave members access to unmatched savings.
At first, Price Club was limited exclusively to business members, who could purchase a wide range of supplies and wholesale items. Jim Sinegal, the executive vice-president of merchandising, distribution and marketing, was instrumental in fine-tuning the merchandise and marketing strategies, helping to turn Price Club into a success story that changed the face of retailing worldwide.
Seven years later, Jim Sinegal channeled his expertise into co-founding Costco Wholesale with Jeff Brotman, and together they opened the first warehouse in Seattle, Washington in 1983.
Over the next decade, both Price Club and Costco Wholesale continued to innovate and grow, and in 1993, the two mega-retailers merged, creating a gifted leadership team that soon made Costco the world's most successful warehouse club.
Today, as the company evolves, it stays true to the qualities that helped attract and retain millions of loyal members around the globe:
Commitment to quality. Costco warehouses carry about 4,000 SKUs (stock keeping units) compared to the 30,000 found at most supermarkets. By carefully choosing products based on quality, price, brand, and features, the company can offer the best value to members.
Entrepreneurial spirit. Throughout the decades, the entrepreneurial drive for excellence has continued to define Costco staff at every level. From its management team to the people on the warehouse floor, everyone is united in a common goal to exceed member expectations.
Employee focus. Costco is often noted for being much more employee-focused than other Fortune 500 companies. By offering fair wages and top-notch benefits, the company has created a workplace culture that attracts positive, high-energy, talented employees.