Costco
Costco by Mike Mozart (CC BY)

20 Things You Probably Didn't Know About Costco

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Costco
Costco by Mike Mozart (CC BY)

Costco FAQ

Costco seems to have a magnetic pull for shoppers and business experts around the world. When the first Costco launched in China last year, managers had to close its grand opening early to stem the chaos caused by massive crowds and nearby traffic jams. For those who study retail, analysis of the company's strategy has become something of a cottage industry. The enigmatic warehouse store doesn't follow many of the traditional rules. Here are some lesser-known facts about this fascinating wholesale club operator.

Related: Don't Miss These 20 Perks of Costco Membership

Toilet Paper
Davydenko Yuliia/shutterstock
Why the Aisles Aren't Labeled
a katz/shutterstock

Why the Aisles Aren't Labeled

Costco doesn't label its aisles for the same reason it places popular items at the back: As customers search the store to find what they came for, they see more items they want to put in their carts. Nevertheless, it should be easier to find items in the giant warehouses than in some other stores. Costco stores usually house fewer than 4,000 products in an open layout while the average Walmart, for example, has about 120,000 products cluttering the aisles.

Related: Costco by the Numbers: 22 Surprising Stats

Rotisserie Chickens Are $5
Helen N./Yelp

Why the Chicken and Hot Dogs Are So Cheap

Costco keeps its rotisserie chicken and hot dogs cheap because they are loss leaders. In other words, people come for the meat and stay for the flat-screen TVs. The $5 rotisserie chickens are one of those items placed strategically toward the back of the store so customers can be entranced by other offerings as they walk by. At $1.50, the hot-dog-and-drink combo has been the same price for years

Related: Costco, Trader Joe’s, Aldi: How Do They Stay So Cheap?

741: Costco Stores Worldwide
Jeramey Lende/shutterstock

Costco Is Worldwide

There are 796 Costcos, including 552 locations in the United States and Puerto Rico, 102 in Canada, 39 in Mexico, 29 in the United Kingdom, and 27 in Japan. There's even a Costco in Iceland; 1 in 8 Icelanders signed up for membership before it even opened its doors, according to Quartz. China's maiden Costco store had to close early on its opening day in August 2019 due to the Black Friday-like crowds that overtook it.

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You Must Be a Member
Cheapism
214,000: Full- and Part-Time Employees
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Nearly a Quarter-Million Full- and Part-Time Employees

Worldwide there are more than 243,000 Costco workers, and by all accounts, Costco employees — including about 163,000 U.S. workers — are a happy bunch: Turnover rate is widely reported to be only 6% for employees of over a year; it's more like 60% for retail overall, according to Fortune.

Related: 34 Companies That Changed American Culture for Better or Worse

You Eat Your Way Through the Aisles
Jules Y./Yelp

How Much Costco Employees Make

Last year, Costco raised its minimum wage to $15 and $15.50 an hour, and hourly workers average about $22.50. By cutting costs in other ways (minimal decor and no shopping bags, for example), Costco can hang on to good, productive workers. The company also tends to promote from within.

Get Screened
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Most Employees Have Health Benefits

Some 88% of Costco workers have health benefits. In addition, many employees are eligible for a 401(k) match, dependent care assistance, a counseling program, short- and long-term disability, life insurance, employee stock purchasing, and a health-care reimbursement account.

Related: 23 Health Products and Services That Cost Less at Costco

144,500 Square Feet: Size of Average Store
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The Quality of Kirkland Signature Products
Alastair Wallace/shutterstock

The Quality of Kirkland Signature Products

Costco's private-label products, named after the company's origins in Kirkland, Washington, cost less than brand names but generally deliver high quality. In many cases, products from big-name companies are packaged under the store's Kirkland Signature label. For instance, Costco takes premium wine from highly regarded vintners and sells it for unthinkably low prices — which it can get away with, as the biggest wine retailer in the country. Yet consumer product testing suggests that the toilet paper's popularity may not be justified. It's soft but not very strong, according to Consumer Reports.

 

You Can Replace Your Computer
Hue T./Yelp

Why Costco Doesn't Advertise

Unlike many of its competitors, Costco doesn't advertise (although it does tout deals or send coupons to existing members), which helps keep spending low and profits high. Even without selling anything, Costco can count on membership fees as a revenue stream and has no problem attracting enough new and returning members: 91% of members in the United States and Canada renewed their membership last year, according to the company's annual report, and the number of memberships grew nearly 5%.

Related: 23 Fascinating Facts About Coupons

Costco Visa Sign
Michelle S./Yelp

Why Costco Switched to Visa

For years, Costco famously accepted only American Express from customers wanting to use credit cards, but as of 2016, any Visa card is welcome. Like many of the store's decisions, the split from Amex was related to cost — Visa takes a smaller fee on card purchases and gives back better rewards, as demanded by Costco. There are also many more Visa cardholders than those with American Express. SmartAsset notes the Costco Anywhere Visa card's 4% cash back on gas purchases and other perks.

Costco Connection
Costco

Costco Has a Magazine

Who would have thought Costco had its own magazine, let alone a print monthly with one of the largest circulations in the country? Yet Costco Connection has some 14.3 million recipients. Now, as other national magazines decline and close, even traditional advertisers want a place on its pages of celebrity interviews, how-tos, recipes, and, of course, coupons. Costco Connection is available online for anybody to view or download, and there is an app version for iPhone and Android.

You Can Shop Without a Membership
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You Can Shop without a Membership

Some of Costco's best stuff is accessible even without a membership. In some states, legal loopholes allow alcohol purchases, allowing non-members a chance to try those excellent Kirkland Signature wines. A Consumer Reports study found that Costco has the best prescription prices, and no membership is needed to use the pharmacy. 

Jewelry and Watches Sparkle
Rebecca W./Yelp
$19.3 Million: How Much Costco Owes Tiffany & Co.
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Tiffany Had a Beef with Costco

Speaking of rings, a U.S. district court judge ruled in 2018 that Costco owed Tiffany & Co. more than $19 million for describing some of its rings using the Tiffany name. Costco has argued it was using the term generically.

You Can Buy the Pizza to Take and Bake
Antonia M./Yelp
You Can Buy a Car Through Costco
Cheapism
508: Costco Gas Stations
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Costco Sells (Cheaper) Gas

While cost varies significantly by location, gas is typically 6 to 12 cents cheaper a gallon if members fill up at Costco stations, compared with competitors. The company had 593 stations at the end of 2019, but they don’t take cash. Instead customers can use Visa, a Costco credit card, debit, or Costco cash card.

$100,000: Average Household Income of Members
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Well-Heeled Members Abound

Costco shoppers are much wealthier than the typical big-box-store customer with average household incomes of around $100,000. Household income for the average Walmart shopper is a bit over $76,000, according to Business Insider.

Related: 20 Surprising Finds From Costco