Costco Wholesale Corporation is an American membership-only warehouse club that provides a wide selection of merchandise. It is currently the largest membership-only warehouse club in the United States.
As of 2015, Costco was the second largest in the world (after Walmart).
Costco's worldwide headquarters are in Issaquah, Washington. The company opened its first warehouse in 1983 in Seattle. Through mergers, Costco's overall corporate history dates back to 1976, when its former competitor Price Club was founded in San Diego, California.
As of 1 July 2016, Costco has a total of 705 warehouses, spread throughout the United States (493), Canada(90), Mexico (36), United Kingdom (27), Japan (25), South Korea (12), Taiwan (12), Australia (8), Spain (2) and France.
Compared with Walmart's reputation for "low prices" and Target's for selling "cheap chic", Costco is known for offering low-price, limited-selection "retail treasure hunts", where "one's shopping cart could contain a $50,000 diamond ring resting on top of a 64-ounce vat of mayonnaise".
In the United States, Costco's main competitors operating membership warehouses are Sam's Club and BJ's Wholesale Club. Costco employs about 174,000 full and part-time employees. In 2016, Costco had 85 million members.
Costco was the first company to grow from zero to $3 billion in sales in under six years. For the fiscal year ending on August 31, 2012, the company's sales totaled $97.062 billion, with $1.709 billion net profit. Costco is 18th on the 2015 Fortune 500. The ACSI (The American Customer Satisfaction Index) named Costco number one in the specialty retail store industry with a score of 84 in 2014.
As of December 2013, Costco's board of directors is chaired by co-founder Jeffrey H. Brotman and includes two officers of the company: President/CEO W. Craig Jelinek and CFO Richard A. Galanti.
Costco focuses on selling products at low prices, often at very high volume. These goods are usually bulk-packaged and marketed primarily to large families and businesses. Furthermore, Costco does not carry multiple brands or varieties where the item is essentially the same except when it has a house brand to sell, generally by the Kirkland Signature label. This results in a high volume of sales from a vendor, allowing further reductions in price, and reducing marketing costs. If Costco management feels the wholesale price of a product is too high, they will refuse to stock the product. For example, on November 16, 2009, Costco announced that it would stop selling Coca-Cola products because the soft-drink maker refused to lower its wholesale prices. Costco resumed selling Coca-Cola products on December 14, 2009. Costco also saves money by not stocking extra bags or packing materials; to carry out their goods, customers must bring their own bags or use the merchandise shipping boxes from the company's outside vendors.
Lighting costs are reduced on sunny days, as most Costco locations have several skylights. During the day, electronic light meters measure how much light is coming in the skylights and turn off an appropriate percentage of the interior lights. During an average sunny day, it is very normal for the center section of the warehouse not to have interior lights in use.
Most products are delivered to the warehouse on shipping pallets and these pallets are used to display products for sale on the warehouse floor. This contrasts with retail stores that break down pallets and stock individual products on shelves. Costco limits its price markup on items to 15%; most products have an 8% to 10% markup, while the Kirkland Signature brand products have a 15% markup.