Costco Wholesale Corporation

Logo since 1997
Headquarters in Issaquah, Washington
Company type	Public
Traded as	Nasdaq: COST Nasdaq-100 component S&P 100 component S&P 500 component
Industry	Retail
Founded	September 15, 1983; 40 years ago (1983-09-15) (as Costco) Seattle, Washington, U.S.
Founders	James Sinegal Jeffrey Brotman
Headquarters	Issaquah, Washington , US
Number of locations	876[1][2] (2024)
Area served	Australia Canada China France Iceland Japan Mexico New Zealand Puerto Rico South Korea Spain Sweden Taiwan United Kingdom United States [1]
Key people	Hamilton E. James (chairman) Ron Vachris (president and CEO)
Brands	Kirkland Signature
Services	Merchandise Cash & carry Warehouse club Gas stations
Revenue	US$242.3 billion[3] (2023)
Operating income	US$8.114 billion[3] (2023)
Net income	US$6.292 billion[3] (2023)
Total assets	US$68.99 billion[3] (2023)
Total equity	US$25.06 billion[3] (2023)
Members	132.0 million[1] (2024)
Number of employees	316,000[3] (2023)
Website	costco.com

Costco Wholesale Corporation (commonly shortened to Costco) is an American multinational corporation which operates a chain of membership-only big-box warehouse club retail stores.^[4] As of 2021, Costco is the third-largest retailer in the world^[5] and is the world's largest retailer of choice and prime beef, organic foods, rotisserie chicken, and wine as of 2016^[update].^[6] Costco is ranked #11 on the Fortune 500 rankings of the largest United States corporations by total revenue.^[7] Costco uses a club warehouse wholesale retailer channel of distribution while also selling their private label brand directly to consumers.^[8]

Costco's worldwide headquarters are in Issaquah, Washington, an eastern suburb of Seattle, although its Kirkland Signature house label bears the name of its former location in Kirkland. The company opened its first warehouse (the chain's term for its retail outlets) in Seattle in 1983.^[9][10] Through mergers, however, Costco's corporate history dates back to 1976, when its former competitor Price Club was founded in San Diego, California.^[11][12][13] As of April 2024^[update], Costco has 876 warehouses worldwide: 600 in the United States, 108 in Canada, 40 in Mexico, 4 in Puerto Rico, 33 in Japan, 29 in the United Kingdom, 18 in South Korea, 15 in Australia, 14 in Taiwan, 6 in China, 4 in Spain, 2 in France, 1 in Iceland, 1 in New Zealand, and 1 in Sweden.^[1][2]

History

Price Club

Costco's earliest predecessor, Price Club, opened its first store on July 12, 1976, on Morena Boulevard in San Diego, California. It was founded three months earlier by Sol Price and his son, Robert, following a dispute with the new owners of FedMart, Price's previous membership-only discount store.^[14] Price Club was among the first retail warehouse clubs, beginning with its Morena Boulevard store inside a series of old airplane hangars once owned by Howard Hughes.^[15][16] The store, known as Costco Warehouse #401, is still in operation today.^[17][18]

Price Club's sales model targeted small business owners, selling items in bulk for a discounted price at no-frills outlets that were accessible only with an annual membership fee.^[19] The company launched an initial public offering in 1980 and expanded to 24 locations in the Southwest and 1.1 million members by early 1986.^[13][19] Price Club expanded into Canada in 1986, opening a store in Montreal,^[20] followed by a Mexico City store in 1992 as part of a joint venture with hypermarket chain Controladora Comercial Mexicana.^[21] The company also announced plans to open stores in Spain and Portugal through their Canadian subsidiary.^[21]

Costco opens

Jim Sinegal and Jeffrey H. Brotman^[22] opened the first Costco warehouse in Seattle on September 15, 1983.^[23] Sinegal had started in wholesale distribution by working for Sol Price at FedMart; Brotman, an attorney from an old Seattle retailing family, had also been involved in retail distribution from an early age. During this time, small businesses were given an 8% or 9% discount on inventories.^[24] He began his retail involvement as a grocery bagger.^[25] A second store opened in Portland in October, and a third in Spokane in December 1983.^[9] The company went public in 1985 with 17 warehouses nationally and 1,950 employees.^[23][26] The company was initially headquartered at its first warehouse in Seattle but moved its headquarters to Kirkland in 1987.^[23]

The "PriceCostco" merger

In 1993, Costco and Price Club agreed to merge operations after Price declined an offer from Walmart to merge Price Club with their warehouse store chain, Sam's Club.^[27] Costco's business model and size were similar to those of Price Club, which made the merger more natural for both companies.^[13] The combined company took the name PriceCostco, and memberships became universal, meaning that a Price Club member could use their membership to shop at Costco and vice versa. PriceCostco boasted 206 locations generating $16 billion in annual sales.^[15] PriceCostco was initially led by executives from both companies, but in 1994, the Prices left the company to form PriceSmart,^[13][28] a warehouse club chain in Central America and the Caribbean unrelated to the current Costco.^[29]

Costco moved its headquarters from Kirkland to Issaquah in 1996; it chose to build a new headquarters campus next to a warehouse store to allow buyers to check sales and merchandise.^[30] They had originally planned to move by December 1993 to Redmond, another Eastside city, but delays in road construction near the warehouse site caused the company to reconsider.^[31] The former Kirkland headquarters, a 10.7-acre (4.3 ha) campus, was sold in late 1996.^[32]

The company began testing store conversions to Costco branding across the Southwestern United States in late 1996. It officially reverted to using the Costco name and stock symbol in February 1997, with all remaining Price Club locations subsequently rebranded as Costco.^[33][34]

Other company milestones

The first Costco warehouse in Seattle was replaced with a new building on an adjacent lot to the north in March 2005;^[35] the company was able to arrange to keep the same address for the new building, which was on land acquired from Seattle Public Schools.^[23][36] The original building was demolished and replaced by a parking lot, gas station, and car wash—the company's first—that opened in 2006.^[37][38]

In 2014, Costco was the third largest retailer in the United States.^[39] That year Costco announced plans to open an online store in China using Alibaba Group.^[40]

Costco announced the opening of 29 new locations in 2016, the most in one year since 2007.^[41][42] Span Construction, led by King Husein, has constructed almost all of Costco's buildings since 1989.^[43]

Costco opened its first warehouse in China on August 27, 2019, in Shanghai. The store's opening garnered much attention, which led to its opening day being cut short over safety concerns.^[44]

The first Costco in New Zealand was first opened at West Auckland in September 2022,^[45][46] delayed from mid-August due to the economic impact of the COVID-19 pandemic.^[47]

Costco today

In the United States, Costco's main competitors operating membership warehouses are Sam's Club (a subsidiary of Walmart) and BJ's Wholesale Club.^[48] Costco employs 316,000 full and part-time employees worldwide.^[1] Costco had 90.3 million members in 2017.^[49][50] In 2020, Costco had 105.5 million members.^[51] In 2021, the company had 111.6 million members.^[52] As of November 2023^[update], Costco had 129.5 million members.^[1]

Costco was the first company to grow from $0 in sales to $3 billion in sales in under six years.^[15] For the fiscal year ending on August 31, 2012, the company's sales totaled $97.062 billion, with $1.709 billion net profit.^[53] As of 2019^[update], Costco is ranked #14 on the Fortune 500 rankings of the largest United States corporations by total revenue.^[54] The ACSI (The American Customer Satisfaction Index) named Costco number one in the specialty retail store industry with a score of 84 in 2014.^[55]

From December 2013, Costco's board of directors was chaired by co-founder Jeffrey H. Brotman and included James Sinegal, co-founder and director, and two officers of the company: president/CEO W. Craig Jelinek and CFO Richard A. Galanti. On August 1, 2017, Jeffrey Brotman died.^[56] As of August 2017^[update], James Sinegal and W. Craig Jelinek remained on the board. Jim Sinegal stepped down in 2018.^[50]

Locations

As of April 2024^[update], Costco has 876 warehouses worldwide:^[1][3]

• 600 in the United States
• 108 in Canada
• 40 in Mexico
• 4 in Puerto Rico
• 33 in Japan
• 29 in the United Kingdom
• 18 in South Korea
• 15 in Australia
• 14 in Taiwan
• 6 in China
• 4 in Spain
• 2 in France
• 1 in Iceland
• 1 in New Zealand
• 1 in Sweden

International locations

Warehouses outside the U.S. are similar to the company's domestic locations, featuring generally identical layout, signage, and even parking lot markings.^{[57][58][59][60][unreliable source?]} Food court menus are tailored to international tastes, with meat pies on offer in Australia; poutine in Canada and France; seafood-topped pizza in Asian locations; pastor taco-topped pizzas in Mexico; clam chowder in Japan, South Korea, and Taiwan; plokkfiskur in Iceland; and jacket potatoes in the UK.^[61]

In Canada, it is a participant in the voluntary Scanner Price Accuracy Code managed by the Retail Council of Canada.^[62]

Largest and smallest locations

In 2005, the world's largest Costco by square feet was warehouse #692 in Hillsboro, Oregon with 148,663 sq ft (13,811.2 m²).^[63][64] In 2015, Costco completed an expansion in Salt Lake City, Utah, making it the new largest Costco at 235,000 sq ft (21,800 m²).^[65] Costco is currently working on getting approval to build their new largest ever retail store in Fresno, California at 241,000 sq ft (22,400 m²).^[66]

In 2019, Costco opened its biggest store in Canada, in St. John's, Newfoundland and Labrador; the store is 182,000 sq ft (16,900 m²).^[67]

In 2011, Costco's highest-volume store was in Seoul, South Korea.^[68] In 2018, the store in Taichung, Taiwan, ranked at the top in the number of members and was second in the world in sales volume, behind South Korea's Yangjae store in Seoul. Of the 14 Costco operations in Taiwan, three – Taichung, Neihu, and Chungho – ranked in the top 10 in the world in sales volume.^[69]

As of 2019^[update], the smallest Costco is in Juneau, Alaska.^[70]

Costco Business Centers

Costco Business Centers are warehouses similar to regular Costco warehouses, and are open to all Costco members, regardless of membership type. Their merchandise caters predominantly to enterprises, with a focus on small businesses. Business Centers do not carry most consumer items like clothing, jewelry, media, and tires, while carrying larger quantities and more options for the business products they do carry.^[71] More than 70% of the items that can be acquired from a Costco Business Center cannot be found in a typical Costco store.^[72] Some locations do have a food court, a gas station, or both. Unlike regular warehouses, most Costco Business Centers have a Print & Copy Center which provides printing professional services. They have large parking spaces for trucks and are capable of delivering goods to businesses in bulk quantities, with a delivery charge of $25 for orders that are below $250.^[72] Costco Business Center operating hours^[73] are shorter than regular warehouses (usually opening at 7:00 am on Mondays to Saturdays and closed on Sundays), while discounts and coupons for Business Centers are issued separately from regular warehouses.^[74][75]

The first Business Center was a converted Costco warehouse in Lynnwood, Washington that reopened in October 1996 following renovations; the change was made after a conventional Costco warehouse had opened in nearby Everett.^[76][77]

Locations

As of August 2022^[update], there are 22 Costco Business Centers in the United States, located in Orlando, Florida; Texas (Stafford, and Dallas); Minneapolis, Minnesota; Phoenix, Arizona; California (Commerce, Hawthorne, Hayward, North Hollywood, Sacramento, San Diego, South San Francisco, Ontario, Westminster, San Marcos, and San Jose); Denver, Colorado; Morrow, Georgia; Bedford Park, Illinois; Hackensack, New Jersey; Las Vegas, Nevada; and Washington (Lynnwood, and Fife).^[78] A Business Center in San Marcos, California opened in March 2022.^[79]

The first Costco Business Center outside the U.S. opened in Canada in Scarborough, Ontario, in March 2017.^[80] In September 2020, the second Canadian Costco Business Centre opened in Saint-Hubert, Quebec, near Montreal.^[81] A third Canadian Business Centre opened in the Ottawa neighborhood of Gloucester in March 2021.^[82]

Finances

For the fiscal year 2023, Costco reported earnings of US$6.292 billion, with an annual revenue of $242.29 billion.^[3]