20 Things You Didn’t Know about Costco

Costco

Anyone who’s ever been to one of its sites will know at least one thing about Costco- it’s huge. From the trolleys to the warehouses to the rotisserie chickens, the store does things on a mammoth scale. Except, of course, when it comes to prices. With $1.50 getting you a jumbo hotdog and refillable soda, $4.99 netting you a goose-sized rotisserie chicken, and just a few dollars more getting you pretty much anything else you could need, it’s heaven for bargain seekers. Keep reading to find out more about Costco.

1. You can save big with Kirkland

Most stores have their own brand of goods, and as any shopper on a shoestring knows, sticking to it can do wonders at slashing your weekly food bill in half. In Costco’s case, ‘Kirkland’ is the name of the game, and wouldn’t you know it, many of the products in the line are made of the exact same ingredients, in the exact same proportions, and at the exact same food-processing plants as the name brands charging twice the price.

2. You don’t need to be a member to shop there

If you’ve been wondering how stores like Costco manage to offer such huge discounts, it’s simple: thanks to their fee-paying members, they can subsidize the kind of huge purchasing orders that translate to equally huge savings down the line. With that kind of model in place, you’d have thought they’d have plenty of barriers in place to restrict non-members sneaking in. And they do, except for one little loophole. Costco Cash Cards can be purchased by members and gifted to non-members, entitling them to shop till they drop anytime they like.

3. It’s the biggest hot dog seller in the US

Prices may rise and prices may fall, but the one thing you can always rely on is the $1.50 you’ll pay for a hot dog and refillable soda at Costco. The company has been stubbornly refusing to charge a cent more or less for the meal deal since the 1980s… but the decision has clearly paid off. Costco now serves more than 100 million hot dogs at its food courts every year; 4 times the number sold by all Major League Baseball combined.

4. It sells fast food at a loss

If you counted every hot dog, every soda, every slice of pizza, and every rotisserie chicken sold at Costco’s Food Courts, you’d find the store outsells every other fast food joint in the US. Which makes it a puzzle why it’s not making any money from it. Speaking to the Seattle Times, Costco CFO Richard Galanti admitted the company eats around $30-40 million in gross margin every year because of its refusal to lift the cap on its food prices. But before you bring out the violins, it’s worth considering how much traffic the cheap, ready-to-eat food drives into the store everyday… and how much that traffic is then spending on merch while they’re there.

5. It’s preparing for the apocalypse

If the three-minute warning sounds, see if you can squeeze in a quick visit to Costco. The store offers Emergency Cube Food Kits, doomsday-ready food boxes containing all you and your family need to get through an entire year of self-isolation. Promising a mix of “grains, fruits veggies, meats and beans, dairy, baking essentials, drinks, and even dessert”, the freeze-dried meals need nothing more than a drop of water to transform into, and we quote, “healthy, well-balanced meals your whole family will love.”

6. You don’t need a car to park there

If you thought you could turn up at any Costco in the country and get exactly the same experience, think again… at least as far as the parking goes. Mindful of tailoring its shopping experience to meet the exact needs of its regional customer base, Costco has treated shoppers in Lancaster, Pennsylvania (an area with a strong Amish population) to two distinct car parking areas: one for cars, and another for horse and buggies.

7. You don’t need to be a member to buy alcohol

Costco imports more fine French wines than any other retailer in the US, and fortunately, you don’t have to be a member to take advantage of the fact. If your local Costco has a separate entrance for its liquor store, you can simply march right in and fill your cart with booze- no membership card required. Even if it’s inside the store, you can still stock up: just ask for a ‘Temporary Alcohol Shopping Pass’ at the customer service store.

8. It’s not stopping at death

If you thought Costco just served the living, get ready for a surprise. Although it’s not quite at the stage of performing funerals (not yet, at least), it’s got almost everything you need to do it yourself, including funeral wreaths, caskets, urns, and a plethora of other funeral related gear.

9. It sells more clothes than Ralph Lauren

Granted, it’s probably not your first port of call for directional fashion-pieces, but thanks to its low prices, huge selection of leisure essentials, and discounts on big names brands like Tommy Hilfiger, Adidas, and Calvin Klein, Costco actually sells more clothes on an annual basis than dedicated fashion outlets like Old Navy. According to The Washington Post, clothing and footwear now generate a massive $7 billion for the store every year. “Costco has quietly become an apparel destination,” said Simeon Siegel, a retail analyst for Instinet tells the Post. “It is clearly resonating with shoppers and winning over brands at the expense of department stores.”

10. The layout is a clever ploy

If you’ve ever been inside a Costco store, you’ll know what a head-scratcher navigating the layout can be. With no overhead signs to tell you which aisle is storing the cereals and which aisle is home to the beans, you’ll need to walk up and down almost every inch of the store to find what you’re looking for… which is just how Costco likes it. The maze-like interior has been specifically created to make sure shoppers walk the entire length of the store before they can leave, given Costco every possible opportunity to inspire visitors to abandon their list and load their carts with impulse buys.

11. The people handing out free samples don’t work for Costco

Next time you’re wondering where to find the cocoa pops, don’t bother asking one of the friendly-looking people handing out free samples. Whereas most stores utilize members of their own staff for the task of product sampling, Costco contracts it out. Each country uses a different contractor, but in the US, the store relies on the good folk of Club Demonstration Services.

12. It’s got some embarrassing secrets in its past

In 2007, Costco was forced to issue a recall on its TKO Sports Heavy Punching Bags after a Cincinnati family discovered a family-sized hamper of dirty laundry stuffed inside theirs. “[There were] thongs, women’s underwear, men’s underwear — some used, bathing suits and bras,” Joe Heckel told Fox. “We could not believe there were clothes inside instead of sand.” And not just any old clothes at that. The underwear had been well worn by the time it found its way into the bag, leading Heckel to comment, “It stunk to high heaven so I zipped it up real quick.” Those responsible for the misstep were shown their marching orders, and Costco quickly recalled the rest of the offending items.

13. It kicked Coke to the curb in 2013

After a long and mutually beneficial partnership with Coca Cola, Costco made the decision to replace coke with Pepsi in all its food courts in 2013. “It’s a big shift,” Costco VP of food services Alan Bubitz told BevNET at the time. “They’re the only vendor we’ve ever had for the majority of the business locations.” The decision may have come as a blow to Coke, but with the retailer shifting over 100 million ‘hot dog and soda’ combos every year, it was the deal of the decade for Pepsi.

14. It’s been around since 1976

In 1976, the very first Price Club (Costco’s forerunner) opened in Morena Boulevard in San Diego, California. The store, which was the first to launch the concept of retail warehouse clubs on an unsuspecting world, was housed in a series of old airplane hangars previously owned by Howard Hughes. Subsequently renamed Costco Warehouse #401, the warehouse is still open for business all these years later.

15. It’s huge overseas

Thought the US had a monopoly on the Costco label? Then think again. Costco may have been founded in the US, but these days, it’s very much a multi-national affair. Thanks to the rapid expansion that’s taken place over the past 2 decades, it now boasts 785 warehouses in total, with 546 of them based in the US and Puerto Rico, 100 in Canada, 39 in Mexico, 29 in the UK, 26 in Japan, 16 in South Korea, 14 in Taiwan, 11 in Australia, two in Spain, one in Iceland, one in France, and one in China. Next year, it plans to add another warehouse and country to the list when it opens in New Zealand.

16. It’s got its own magazine

Keen to keep up to date with the goings-on at Costco? Then you’re in luck. The Costco Connection is a free magazine available to all members, either by post or online, packed with coupons, ads, business news, lifestyle articles, celebrity and entertainment features, recipes, and home improvement articles. Of course, the editors are careful to ensure that any article includes some not-so-subtle references to products available to buy at the store, leading to long time publisher, Ginnie Roeglin, noting, “We see about 56% of our subscribers a month buy something at one of our stores based on something they’ve read in the magazine.”

17. It’s the fifth-largest optical company in the US

Costco isn’t just about cheap chicken and 5-gallon tubs of mayonnaise. These days, the brand is as much about services as it is about products, with Costco business services, Costco Optical, Costco credit card, and Costco Travel all doing a roaring trade. Costco Optical, in particular, has done phenomenally well, experiencing such growth in recent years that it now ranks as the fifth-largest optical company in the US.

18. Brad Pitt is a very unsatisfied customer

In 2015, an investigation by The Humane Society of the United States turned up some pretty unedifying facts about how Costco sourced its eggs. Following the report going public, numerous celebrities, Brad Pitt included, called on Costco to get in line with the direction being taken by other retailers and abandon cage-free eggs. Costco promptly did as it was told… although considering the animal welfare issues at its cage-free egg farms turned out to be even worse (cannibalism and increased mortality were just two of the complaints thrown their way), it didn’t do much to appease the moral majority.

19. It’s the biggest car dealer in America

In 2018, 24/7 Wall Street reported that Costco had shifted more cars that year than any other dealership in the US, despite not being a dealership itself. Costco Auto Program, the brand’s auto division, managed to shift a whopping 650,000 vehicles that year, a hefty 20% more than AutoNation.

20. It’s got a generous returns policy

Some stores can be a bit stingy with their returns policy, but not so Costco. Sign up to be a member, and regardless of when or why you decide to cancel, Costco will issue a full and immediate refund of your membership fees. The terms for returning fresh produce you’re not 100% thrilled by are just as good, while the 90-day return policy on electronic goods is one of the most generous around.



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