Costco has announced that their 2nd quarter profits are up 31%! That’s a lot!
Bloomberg provides some obvious theories as to why this might be:
By selling in bulk, Costco attracts shoppers seeking to buy more goods with fewer trips to counter higher food and fuel costs as the U.S. economy slows. Customers, who pay annual membership fees, also sought out cut-rate luxury items such as Burberry and Fendi handbags and Omega watches.
Costco is “focused on the member and the value that they are bringing to the member,” Lauri Brunner, an analyst at Thrivent Asset Management in Minneapolis, said in a March 3 telephone interview. The chain continues to “reap the benefits of trip consolidation by consumers.”
Are you shopping at Costco because you’re broke… or because Costco rocks your socks off?
Costco Profit Rises 31% as Shoppers Stock Up on Food (Update4) [Bloomberg]
(Photo:greenwenvy08)
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What about I’m broke because I shop at Costco. Leaving Costco w/o spending over $100 is quite a difficult task.
But I still love them!
Things I regularly buy at Costco:
1) Diapers
2) Milk (why is their milk so good, and why does it last so long?)
3) Mangos!
4) Chicken breasts, steaks, hamburger meat…my brother loves their hamburger patties with blue cheese.
5) Multi-grain bread
6) Gas. Cheaper than anywhere.
Yup, love me some Costco.
The problem with showing receipts at Costco is the staff just x with a marker and count nothing.As for the negative comments about their CEO, do a little research. He only makes a pittance compared to most executives, pays the staff well and offer good benefits. Sam’s Club employs the unemployable and treats them like crap.
@calvinneal: I was gonna say…Costco’s EO makes something like $200,000 a year…what a great corporation…good for consumers, good for employees…and they are making money. Corporate America could learn a few things from Costco.
Minus their crappy in-store video game and game console selection, I’m shopping their because they rock my socks off. Why send in your poorly designed/cheaply manufactured Xbox 360 when you can return to Costco for a full refund. I did exactly this when I got the RRoD. Where else can you do this…?
@calvinneal
Your comments are so dead on. I see this almost daily (every time I’m in a Costco store around the Puget Sound/Seattle area) where I see the same employee faces year in and year out. Their turnover has got to be so incredibly low because I’ve literally watched some of their employees age before my eyes over the past twenty years or so.
I was once told by a Costco employee that they (Costco) can keep prices down (on some products) because of the high volume of anual memberships. Further, he stated, that when they (Costco) find that individual items are priced higher than other retail outlets, they LOWER the price. I saw this for real, with the price of hearing aid batteries. Costco lowered the price when it was determined that the cost they previously charged was higher than needed due to annual membership charges.
here is my take on Costco. I’m convinced they dont make money on retail sales. Their prices, even with the deals they make with suppliers, are just too low. I’m convinced they are in the business of selling lists to marketers. Think about it. What is the absolutely most valuable list a marketer can buy than: These people all bought this %100 for sure and they live HERE! I shop at costco… but they dont have my address or any other information for that matter. When I signed up for the “membership card” and handed in the app, the guy asked for my Drivers Liscense. I told him I don’t drive. The then asked if I had a passport. I told him I did not plan on flying to afganistan from within the store and why was he asking me for ID? He then told me the pitfalls of not verifying your info. I would have to pay with cash or atm but not checks. Well…. what a pitty. I told him no worries. Who the hell pays with a check anyway. So he, with visible disaproval, gave me my card.
Costco isn’t perfect.
You should see some of the things we throw out.
If you return a BBQ that you used once or twice, we throw it into the compactor. For the past three days, I’ve thrown safes into the compactor. Bed Headboards, endless amounts of flour, sugar, soup, fruit and veggies. A couple bookshelves, the list goes on and on.
I don’t shop at costco because I live in a studio apartment in DC… HOWEVER, if I could, I would. They’re good to their employees and don’t pay their CEO nine bazillion dollars to sit in a chair.
[www.laborresearch.org]
@Arkley:
AHHH!!!! Is there any way for the Average Joe to sneak in and snag said BBQ before it’s tossed?
I live in a house of 6 college guys. We have a total of 4 Costco memberships between us, and spend close to $400/mo there. Costco is more fun to visit/wander around in than an Apple store – and for me, that’s saying something!
@binutils:
An oh yeah, TWO DOZEN roses for $15. That’s gotten me out of a few potentially fatal situations with the missus ^.^
The Chicago Tribune had an article on the magnificentness that is the $1.50 Hot Dog/Soda combo: [www.chicagotribune.com],0,3871603.story
And the best part is the new scanning guns, which helps make the lines move a whole lot faster.
Yup Costco is the model firm.
Costco rules! What’s not to like? It’s obvious from these posts why they are doing well. They take care of their customers and offer both lower price AND higher value (better return policy, added services like car sales, etc.). LONG LIVE COSTCO!
@scoobydoo: Cause those are one-of-a-kind items so if you don’t buy it immediately, it’s gone.Eventhough they not perfect it’s still way better than most stores.
@sourc3: I wish, otherwise I’d have one myself. Very rarely do the returned items get sold to employees or re-sold (that is, larger items). In fact, I think it’s only happened twice. Once with a Wii that was returned and was to be sold again. And once with a mattress that was returned and the manufacturer told us to throw it out, but our manager sold it to an employee at a discounted price.
I registered just to add my comments about Costco. We love the place, having shopped regularly when we lived in California and Missouri. The customer service and return policy is great. I have taken something back that broke a year later (an expensive vacuum cleaner) and they gave me a refund with no hassle.
Even better is their employee policy. I see so many retail places that pay their staff a pittance, and then wonder why customer service is so bad. Also, Costco (according to a NY Times article) has a great health plan available to their employees. That means that unlike other companies, I as a taxpayer am not subsidizing their health costs.
Now that we live two hours from the nearest Costco we joined the local Sams Club (reluctantly). What a difference. Long lines, rude cashiers, somewhat dirty store, no rebates on purchases, and a general feeling from the employees that they really do not want to be there.
A final tip – We went to Hawaii several times and bought all our souvenir nuts and other items at the Honolulu Costco for about half the price of the tourist shops. Check them out when you go.
@mikelotus: True dat.
Costco is certainly awesome, I’ve never had a bad experience there and nothing beats a $1.50 for lunch. My biggest issue is that I may be moving from a place where my Costco fix is only 10 min away to a place where it’s 3 hours. That’s gonna be tough to take.
@Arkley: If the safes Costco sells can be compacted by a trash compactor… I think I’ll look elsewhere for safes.
“Welcome to Costco. I love you”
-Idiocracy Movie
God I miss Costco.
I moved to London about a year ago, and as luck would have it they have stores in the UK (although in really inconvenient places – think 2 hours on a bus and a 1 mile hike). After a few months I started feeling homesick, so I went to Costco! Apparently, the Executive memberships will work at any store in the world, which is what I had.
I know this sounds stupid, but being in that store made me feel a million times better. It looked and felt like a real US Costco. I got a Cuisinart coffee grinder for £50 (at least £90 everywhere else) and REAL CHOCOLATE CHIPS!
Of course I’m in Finland now, and they don’t have them here. I think I’m going to go cry now….
*sniff sniff
On another positive note, I went there after work to look for tiles (I had planned on getting them at Home Depot since I had a 10% off coupon), but reading this reminded me that I hadn’t looked at Costco yet.
Got exactly the marble tiles that I wanted, paid way less than the Home Depot prices. Yeah for good publicity and word of mouth as free adversiting! This one consumerist post alone earned Costco about $400.
Love Costco. I’m totally gonna buy my casket there when I die. ;-P
@jeremybwilson: The gent at the Business Centre one in Fife who works door most days remembers me by name. (My field office is in Federal Way, so it’s nice and convenient, though my real office, which i never see, is in Factoooooooooooria. It’s nice, it has an Aeron chair, even! I think i saw it in early February…that’ll teach people not to leave crap on my desk.)
I realized i’ve been a field tech for the T that is Mobile for a year and a half. The Fife store literally has one new face in that time, and hasn’t lost any. That’s scary good. I think my peer group at work has entirely refreshed at least once in that time.
But damn, that hot dog/soda hookup remains epic. With good relish and mustard, too!
Funny, since in the last month I’ve decided not to renew my membership. I used to be an avid shopper of the CostCo, but then I moved. I now live near one of (if not THE) busiest centers in the midwest, the Madison Heights, MI store. I always justified the cost of my membership with gas purchases (always 10-20 cents cheaper a gallon then anywhere around) and razor blades.
Then the gas crunch happened, and now I actually find cheaper gas at an independent station on 8 mile, about a mile south of my house. It’s always 5-10 cents cheaper then the CostCo gas. Also, the cost of razor blades has climbed over the past two years, even though they’re the same blades as before and newer blades have come out that are even more expensive.
The final straw, though, since rising costs happen everywhere, was the fact that for the past six months, I cannot go into the store without a 20 minute wait. Doesn’t matter the time of day, or day of the week, they always have too few cashiers, and at least half the lanes empty. If this is the busiest store in the midwest, as I’ve been told by multiple employees when I ask when the best time to shop is, why don’t they put two or three more checkers on the clock to keep lines at 3 or 4 people deep instead of 7 or 8?
I’ve sent letters, and used the in store complaint box, and received not so much as a reply. I’m done. The couple things I can save cash on (and since I switched to a safety razor last month, I’m not even buying the blades anymore) can be picked up by borrowing a friend’s account. If my member opinions aren’t valued, I’ll just buy smaller quantities and watch for sales.
If you have yet to take a look at their organic milk 3 packs, the expiration dates that will astound you.
I shop there because the samples fill me up.
Oh, and their games are cheap
Costco is definitely my favorite brick and mortar store. Those crafty bastards know how to make me open my wallet.
Although I hear Costco treats their employees great etc etc I’ve never thought that buying enough stuff to fill a warehouse so you can supposedly save was a good idea. I’d say people just need to buy less stuff. *shrug* That’s just me.
I shop at Costco because they have the best return policy among retails. (Please don’t abuse it).
@synergy: good idea, i will only wipe my ass every other day and save on butt wipe.