The Resilience of Costco (2018) | Hacker News Reader

The Resilience of Costco (2018)

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138 pointsawiesenhofer160 comments

I love Costco, truly. I love the lack of mental noise I feel when I browse the aisles. I love the selection of goods and pricing leverage they have on manufacturers and their competitors.

However, Costco's technology is woefully inadequate for a wholesaler of their size. I've even heard this from Costco employees dealing with their employees portal (shout to /r/costco). Lack of sufficient tech is a systemic issue with them.

How is it possible that they cannot give me an accurate inventory of the items in the stores near me? Sometimes I see a product on social media and think "Hey it would be great to know if that product is only offered in Southwest US Costcos. Even trying to find a map of the store and where the products are kept (when there is some flux) is troublesome (yes, I get it's the "Ikea" method of needing to push you through the entire store).

I agree, but the fact is probably that they don't want you to know. They want you to have to show up and end up buying stuff. They also continually rearrange their stores for no apparent reason, so you're wandering around looking for the same item you bought two weeks ago.

I like Costco, but have considered abandoning it because I'm sick of staple items I've bought for years there just... disappearing. You drive over there and start scouring the aisles for, say, brown rice. NOPE. They just don't have it anymore. And in many cases it's KIRKLAND products.

I understand that a supply of something might temporarily dry up, but then I wish Costco would replace it with the same thing from another supplier at full price if need be. Then at least I can get my shopping done without driving all over town. If I'm going to have to do that, screw it; I'll just go to the regular grocery store.

If you want brown rice in bulk for cheap, have you considered immigrant stores? I ask because I used to go to Makro (the Central European membership-based wholesale chain) for rice, but then I learned that shops serving Indian Subcontinent and Vietnamese diasporas offered rice and other nice things in bulk for prices comparable to that mainstream wholesaler.

KIRKLAND is Costco's brand, it's a white label of a consistent reliable product. Your favorite brown rice brand could've ended up appearing as a kirkland product.

I'm surprised at the shortage of brown rice though, last time I went into Costco I was amazed at the sheer number of gluten free, keto friendly, organic friendly etc products.

The most obvious case of that is the KIRKLAND tortilla chips, they don't even try to hide who makes them.

https://images.costcobusinessdelivery.com/ImageDelivery/imag...

The organic Costco tortilla chips are much better. No idea who makes them but it’s definitely not Mission.

Op is saying Kirkland brands disappear too. I’ve experienced this as well with their wines.

Costco staples aren't necessarily your staples; there are certain products that Costco has continually had in stock for more than the 20+ years I've been wandering the aisles in search of the Arc of the Covenant (I'm certain it's somewhere in there).

But other things that look like stapes can come and go, some seasonally, some after a few years.

Costco is a very "go first" store - you go there, get what you can, and then flesh everything else out at some other store that will keep things in stock even when they get pricey.

Costco is also not the cheapest, not by far, but they are the most consistent.

Butter and soda are two of the most noticeable for me, you can easily beat Costco on both, butter because local producers often supply local stores cheaper, and soda because it's a loss-leader in many places. There are others, find them!

Who thinks of buying butter at Costco? Who would need that much butter to begin with?

There are definitely some items I don't buy at costco simply because I don't need that volume of food.

Butter freezes very well. Stock up and you always have some.

Families, people who bake or meal prep.Ever tried making ghee, requires a lot of butter.

Four pounds of butter isn't that much if you do any cooking, or if you cook in butter instead of oil, etc.

I have ten pounds of butter, none of it Costco (the local gas station sometimes goes nuts on sale). Reminds me of:

> The Costcos don’t want you to know this but the butters at the gas station are cheaper you can take them home I have 458 pounds of butter.

Butter might be one of the best examples since it's one of the best things to buy in bulk to save on costs, and folks who cook use an epic amount of it.

I used very little butter living alone and not cooking more than an average American, if not substantially less. I then got married and now have a family where we are cooking at minimum one meal per night, including some baking.

I'd be surprised if we didn't go through 4lbs of butter per week on average at this point. We typically sub butter in for most oils, as those oils were subbed into recipes during the anti-fat crusades a few decades ago. When you do this your consumption increases even further.

If you tend to not cook yourself or avoid animal fats like the majority of people I could see butter usage not being that high.

Butter also freezes indefinitely, so having less than 90 day supply on hand (12lbs or so) just seems irresponsible to both my family and society as a whole. Keeping even just 30 day stores of staple products seems to be a thing of the past in the US, but I feel it's setting us up for tears.

Edit: Others have already said it, but Costco is actually fairly bad in general for commodity items like butter or rice where you don't care about brand. You will likely find far better deals on "generic butter" at your local restaurant supply store, or even just regular sales at your local supermarket. Ethnic stores for things like bulk rice will almost always be substantially cheaper as well. Costco is rarely the cheapest unit cost, but it wins on convenience.

Where Costco shines are the few specialty items they run through way more volume than most such as imported Kerrygold butter and that sort of "upscale" branded items. Their white label booze is also substantially cheaper for better than average quality as well.

>If you tend to not cook yourself or avoid animal fats like the majority of people I could see butter usage not being that high.

Yeah, I guess that's the rub for me. I will generally use olive/vegetable oil whenever possible and I don't cook to the extent where I have a bunch of unavoidable butter recipe's to begin with. I keep a small bin as a general "just in case" measure but I sometimes don't even go through that.

Also only have a small freezer, so the thought of freezing butter simply never occured to me.

> Who thinks of buying butter at Costco?

"raises hand"

Good quality butter at a cheaper price. We freeze it and it lasts a long time.

Yep. But will they have Kerry Gold this month? WHO KNOWS.

What? Butter is one of the main things I get from Costco. It actually is cheaper than my normal grocery store in that case (I agree with the earlier post in the thread that Costco isn’t always the cheapest.)

I love butter. Especially the Irish butter that just tastes so much better than "normal" butter. Either butter is significantly cheaper at Costco than our grocery stores. I buy like 10lbs and it lasts a few months of cooking etc.

Butter goes pretty quick. I prefer it to oil for cooking, and you’ll toss it in by the stick when baking.

Look up "staple foods" and it will be a rare list that doesn't START with (let alone doesn't contain) rice. But that was just one example of something that Costco sold for years, and then didn't have for years. They may have it again now, but I've given up wasting time looking for it there and now buy it at an Oriental-foods market.

I don't go to Costco "first" in most cases because trips there are far less frequent than regular grocery-store trips. I keep a separate shopping list for Costco, which includes the core items I've been buying there for years. When the list gets long enough, I make a special trip to Costco to restock. That's why it's infuriating to find that a bunch of the items have suddenly disappeared.

I will say that what remains on my list has been pretty steadily available for some time now, with occasional outages. There are quite a few Kirkland products on there. Their peanuts (in the white-labeled metal cylinder) are outstanding, for example.

Kirkland-brand stuff is generally relabeled products from various manufacturers, and usually picked from top-tier stuff; while the details are usually kept quiet, people have matched up 1-to-1 equivalents with other, more expensive products.

A co-worker who once worked sales for a food distributor explained this to me. A term of art if one is interested: “private label”.

Not brown rice, but I guess there is a shortage and now hoarding of rice happening[1]. India has supposedly banned the export of non-basmati white rice.

I guess this could impact brown rice supplies if people who can't get white rice switch to brown rice.

Not too hard to hoard rice. It doesn't require refrigeration and can be stored for a long time. Like toilet paper!

[1] https://www.thenewsminute.com/article/people-hoarding-bags-r...

Its a wholesale club. Replacing an item at full price would be the complete opposite purpose of the store and membership. Its not about the available supply of a product, its about Costco using its purchasing power to buy the product at a cheaper rate in bulk. If the supplier changes the price that item it has to be re-evaluated.[1][2]

"If Costco feels the wholesale price of any individual product is too high, they will refuse to stock the product. For example, in November 2009, Costco announced that it would stop selling Coca-Cola products because the soft-drink maker refused to lower its wholesale prices.[96] Costco resumed selling Coca-Cola products the following month.[1]"

Info on Kirkland Signature[3] information.

[1] https://en.wikipedia.org/wiki/Costco#Kirkland_Signature

[2] https://web.archive.org/web/20091216131039/http://www.ajc.co...

[3] https://www.cnn.com/2022/02/05/business/costco-kirkland-sign...

> How is it possible that they cannot give me an accurate inventory of the items in the stores near me?

It's absolutely intentional. It means you have to browse the store. And if something piques your interest -- you know you can't wait to buy it "next time" since it might not be there.

What it means is that I just buy it on Amazon rather than wasting my time to see if my local Costco has it in stock.

Except with Amazon I always worry if it’s a Chinese counterfeit that is going to burn down my house, whereas Costco only carries curated, top-notch items.

Costco has been trying to get adoption of their online selling platform, but their lack of real-time inventory is a massive impediment. I tried to use it a couple of times but it ends up being an endless back and forth with a picker who is trying to offer up substitutes for everything. Just gave up on it.

Apparently Costco plans a fully separate online order picking area in one of their new massive warehouses. With that they won't have the uncertainty of shrinkage (Costco has a serious problem with theft), and of course the amount of inventory that is moving around the store in people's buggies.

I don't think there is any intention to it, but it's just a legacy remnant of being a very successful B&M company where they would periodically do an inventory and figure out where they actually stand.

Shopping at Costco is frustrating. It's fine for grocery staples (dairy, fruit, veggies, etc). But when it comes finding specific items in stock (and which aisle in the store), Target and Walmart are way ahead of Costco.

Ordering something at Target for Order Pickup is very straightforward and convenient. For Costco, I guess they don't want you to just order 1-2 items for order pickup and be on your way. Not to mention, the parking lot situation at Costco is a major turnoff to going.

We also hated Costco parking. We go 1 hour before close and no longer have any problems with it. We also spend less time in line, aisles, receipt check, gas, and leaving.

Costco also accepted an item return over a year later. To be fair, it almost caused a fire by turning itself on in the middle of the night.

Its a wholesale club. The items aren't in permanent locations because they are making purchases in bulk when the price is advantageous to do so. This means they won't always have the same items all the time. The items you mention are in the same location regularly because the supporting infrastructure is permanent. Freezers for milk, desserts, the bakery and other products aren't going to move around very often.

For online ordering where do you want them to store your purchase? The whole layout of the store is that all available inventory is on the floor since its a warehouse by design. Target and Walmart are retail designed stores which has a different purpose in mind.

Seriously?, the parking is like any other store, there are peak and non-peak times.

-Costco has a serious problem with theft

The thread yesterday (based on another post from the same source as this one) said Costco had much lower theft (shrinkage) than rivals.

This article states as much: “Costco loses only 0.1% of revenue to theft annually. For context, that's 90% lower than Walmart's shrink rate.”

I have a hard time understanding how someone can steal something from Costco. Sure, it's not impossible, but it seems really hard.

First, because of the size of the products themselves. It's hard to conceal them. And small items come in blister packs which are hard to open even at home. Second, because they have cameras and have almost every shopper's photo and address on file. Third, because they have the receipt checkers at the exit.

I'd love to know how theft happens.

If I had to take a guess, it's more about policy than "they don't catch them". I doubt it's someone coming in, taking a TV and walking out.

It's more like if an item or 2 "sneak in" and the checker just lets them go. It'd cost more money in congesting the line, grabbing security, etc. to contest that item than it would be to just let them go. They don't want to press charges on someone who spent $100 because they wanted to sneak some $15 pills by. All stores expect X% theft anyway and build it into the price of their item (or secure it better if it's a small, often stolen good, like tech).

It's probably a cultural choice, though. Meanwhile, the Walmart down the street is much more aggressive on that stuff.

Victims don't decide who is charged with theft.

"Pressing charges" isn't a thing.

Depends on where you live.

Seeing as Costco exists in Ontario, Canada. Where citizens with knowledge of a crime can use private prosecution.

https://www.ontario.ca/page/private-prosecutions

Receipt checkers have no ability to prevent thieves from stealing.

Given how people stuff their carts, seems like you could easily bury something expensive at the bottom. If the store is super busy the receipt checkers probably won't disassemble your whole cart.

But how? Run to the warehouse again after the cashier has charged you and bring an item and sneak it into the cart? Sounds very hard to do.

The only plausible thing is to steal at the self-checkout, but the receipts are different and cause more scrutiny at the door.

Sometimes they use the fire exits: https://youtu.be/jPgsOMjEJ4o

Towards the end of the page it summarizes

> For 40 years, Costco has succeeded with a simple formula: reinvest merchandising profits into lower prices and better products

Significant enough investment in tech infrastructure to get it caught up to what might be considered reasonable seems to go against that principle.

The number of very large retailers who can't give accurate inventory counts is hilariously high. Even the ones that do try fail spectacularly, in all directions - I've found that when you see "limited stock" or "none available" you have a chance of finding anywhere from -5 to 50 items. And yes, that means sometimes you will carry an item into the store and it will mystically disappear.

Isn’t shrinkage a big problem in getting an accurate number? Unless you’re recounting everything everyday, I’d assume it’d always be off

I would guess that theft is a pretty minimal factor her. Costco sizes and checking receipts, must severely limit this compared to other stores.

From my observations of working in retail, a lot of people will just blatantly walk out with things knowing the average employee can't touch them. People that steal from stores as a career do not care in the slightest. They're confident in their craft, knowing employees are watching and aware of them. They just walk on out.

The average teenager that just steals because they think being a klepto is cool would probably be deterred by the door watchers though, yeah.

But working in retail, probably a factor bigger than shrinkage is just people picking things up, and throwing it at the back of a shelf in a different aisle. Either they're saving it for a return visit, or they don't want it anymore and are too lazy to bring it back to its shelf.

These are just my observations. I think we're down a rabbit hole of assuming the problem anyway. The main problem with Costco is probably just that they don't have a system for counting individual items, since most things in the store are just wheeled out on pallets and dropped somewhere.

Orrrrr, one of the reasons Costco is able to pay its employees better than industry standard is because they don't have a system for counting individual items that requires a significantly larger number of employees.

Totally agree with you on the rabbit hole.

Yes this is by design. The company is being reimbursed through insurance or given a tax write-off[1] for documented stolen items. As long as they are showing that they put reasonable efforts in to deter theft. This could be a loss prevention department, the electronic sensors, locked cabinets, storing items at the very top of shelving units. The risk of law suits, employee injury or death, bad PR, etc is much more costly than documenting some stolen items.

The big push of retailers closing stores due to theft is an exaggeration when in mosts cases its just reduced in-store traffic and online ordering which doesn't require the stores to be as big for holding as much inventory.[2][3]

Most of the major retailers stats are old and if the numbers were really of concern I'm sure they would release the data but my assumption is their complaint doesn't seem as reactionary when you compare it to their profits. I cite this generic article as an example[4]. It appears to want you to think that theft is such a major part of the retailers problem but no specifics provided with phrasing like "has historically been" or $400 million in theft when the company has made $109 billion with 3% growth[5].

[1] https://www.irs.gov/pub/irs-pdf/p584b.pdf

[2] https://www.cleveland.com/news/2023/04/target-to-close-store...

[3] https://blog.gitnux.com/walmart-theft-statistics/

[4] https://www.wsaz.com/2022/12/09/walmart-may-close-stores-inc...

[5] https://corporate.target.com/annual-reports/2022/financials/...

Thanks for the additional information but to be clear I wasn’t arguing that shrinkage effects a store’s bottom line much, or that employees should be able to tackle thefts in progress. I was arguing that people probably do still steal from Costco and that it could be a factor that makes it difficult to keep accurate stock counts at times. And then went on to say there are probably other, larger factors.

"Costco loses only 0.1% of revenue to theft annually. For context, that's 90% lower than Walmart's shrink rate."

Probably not as big as you’d think. I’d say “high confidence” is a good enough bar for this feature vs. perfection. I’ve never been upset when Target says 1 in stock but the aisle is empty - that’s just the reality of it. If the app has more, I’m usually going to be able to get one.

Whatever Target,l and Home Depot are doing works like 99% of the time for me.

Saying you have a few and then have none, is kinda expected and not really annoying.

Having it say you have none, and then you go to the store anyway to get an alternate and you find what you originally wanted sitting on the shelf, that's annoying.

Costco is worse then that—if you search their website, you have to select “Only show in-stock items”

Why would I want to see items they don’t have? And thats their default.

Inventory systems are hard.

Isn't Walmart known for having the best inventory system? Like real time global data, so they know that someone in Thailand bought some strawberry pop-tarts 5 seconds ago.

Walmart’s is amazing but it still falls short noticeably if you use it quite a bit.

The reality is inventory systems can’t do much beyond “we think it should be in this big box” as detailed inventory costs too much to maintain.

Costco is great.

I don't love losing track of my wife and having to conduct a search pattern to find her again.

The prices are good.

Line of sight: C-

Just sit on the couch near the middle of the store and send her a text. O(1)

That depends on the other person's search pattern. I did the same and got O(n^2). :(

Now I just use the hotdogs as the meeting point.

I see what you did there ;)

I don't think there's a clever joke there.

The place you buy hotdogs is always, meticulously, placed after checkout.

It may well be where they planned lost husbands to congregate.

I would think that if all your markup goes to warehouse and employees (operating costs) and the membership is all "pure profit", there's not a lot of money left over for R&D or tech upgrades without hurting your own margin.

At least if you take the article at face value in the simplicity of it's explanation. I imagine it's more complex than that

They can give you inventory though? Maybe it depends on the class of product though. When I tire or battery shop and they don’t have it they print me a list of other locations and quantities in stock.

I would venture the reasoning for this is that the system that handles inventory was never designed with external customers in mind. Most inventory tracking is done at the register/PoS when the purchase is made. The inventory is automatically tallied all day long as items are purchased and returned. At the end of the day a manifest is built and sent out for the next delivery truck. These systems, at least when I dealt with them, were mostly managed by IBM AS/400's which weren't built with the Internet in mind. The physical inventory is a financial/accounting compliance item to reconcile what the system thinks it has and what is in the store, related to insurance coverage.

Costco tends to order items at wholesale while the price is advantageous in order to pass on the savings which means items aren't going to be located in the same area thus no real need for a map. I would venture since freezers and bakeries are permanent fixtures along with the long-term regular items they purchase it gives the "illusion" that things are kept in specific locations. I don't know how much stock I would put in the idea of the "Ikea" method for Costco as they have returns, membership, pharmacy, eye glasses, and the food court all relatively towards the front which are areas that people come to Costco frequently for. If it was the "Ikea method" they would all be in the back of the store.

> I don't know how much stock I would put in the idea of the "Ikea" method for Costco as they have returns, membership, pharmacy, eye glasses, and the food court all relatively towards the front which are areas that people come to Costco frequently for. If it was the "Ikea method" they would all be in the back of the store.

Do people really go to those parts of the store often? The fridges with fresh food, rotisserie chicken, and items like laundry soap and toilet paper are all the way at the back, which typically are the bulk of my cart. The stuff that's close to the door is typically TVs, vitamins, and toothpaste.

I'm sure there are a few different store layout concepts over time. However you don't need a membership at Costco to eat at the food court or use the pharmacy, purchase alcohol in some states so if we applied the "Ikea" model those would be in the back to have someone "see" all the things they are missing by not being a member. For the paper towels, toilet paper, drinks they are probably regularly stocked items which if you were unloading tucks full of them you wouldn't want to be moving huge quantities all the way to the front of the store. Lastly, i'm sure its also a combination of flow control. Get everyone to the back of the store then filter toward the front building some buffers in line queue volume and getting bunched up in one single area. If you walk in the door and thats where the paper towels, toilet paper, milk, etc is then just getting in the store would be a problem.

All speculation of course, but to me the "Ikea" model didn't seem to fit.

They’ve wasted about ~$100M and three years to build an iPad KYC membership app to replace some of the AS/400 functions. It still hasn’t launched because it’s a fuck up from database to client. Until they hire from outside, their IT will always be shitty.

Here down under, Costco is the first place I and a lot of people I know go to to buy not just household stuff, but electronics, appliances, clothes, shoes and everything possible. Kirkland is a brand I will buy with my eyes closed. The way they were able to retain quality through covid supply chain issues while every other major brand has regressed in quality is nothing short of a miracle.

I really don't like supporting Costco as it's the antithesis to good urban design. It's not healthy for people to be living so separated from shops that stores like costco end up with 1000 car parking lots. Grocery stores should be on every other corner or so of every neighborhood within walking distance. Prices would be kept low due to healthy small business competition. Costco is mearly a symptom of the sickness that is Euclidean zoning.

There are at least 3 costcos that I know of in NYC and they are always packed. Even those living in hyperbolic zoning love costco.

Hyperbolic zoning, I like it, that's clever

Costco has a markup cap of 15% which keeps prices low.

Their parking lots are also also the standard for customer friendly design with the buffer spacing that sacrifices car density.

Tl;dr: I wouldn't choose Costco to make your argument, LOL.

I live 2 blocks from a Costco Small Business Center. It’s great as nobody else has chosen to put a grocery store in the neighborhood.

Then good urban design is wrong.

There’s a Costco in downtown Vancouver, it’s great. I just use a cart to pull my groceries home rather than taking my car and parking (it is next to the hockey and football stadiums and shares underground parking). Sometimes I just walk in to grab the eight dollar rotisserie chicken.

What a markup on the chicken in Canada

Is it markup, or less farm subsidies?

It's great to have a place to buy bulk items every month or two. It's not a symptom of bad zoning, and can happily coexist with small local groceries.

I'm in California, so that is true anyway. But at the same time, I'm in a suburb so "walking distance" is still talking a mile up the hill minimum. The woes of having so much space.

But on the other hand, every supermarket had 1000 car parking lots to use that space with. Even smaller stores will have ~100. One thing I definitely don't miss compared to downtown city planning that nickle and dimed me everytime I wanted to stop.

I live in Tokyo which arguably is one of the most transit friendly cities, and still bus to the nearby Costco to load up every month or two. Sometimes you just need a suitcase full of mozzarella sticks, no questions asked.

My local Costco is closer to the urban core than any comparable general goods store.

You must hate the USA as its exactly what you hate.

Costco doesn’t prevent the things you mention, you should come to my area in NYC. Within 3 blocks I have 3 supermarkets and maybe 12 smaller markets and corner stores. Within a mile I probably have 20-30 supermarkets and one of them is Costco.

A lot of the owners of the smaller markets actually shop at Costco. And you don’t need a car to shop there, you can bike and there are people with vans outside who will take your bike and groceries back home. Costco also offers local delivery.

I wouldn’t say it diminishes from the urban design you mention, in many ways it facilitates it.

They make costcos with apartments on top now. The big issue I think is the quantities are prohibitively large. Cereal is sold in 1 foot square cubes. Granola bars in huge 30 count boxes. Oil by the gallons. You can fill up your modest apartment very vast shopping at costo if you aren't careful. You almost need a basement or garage with storage racking to make the most of your membership.

>Prices would be kept low due to healthy small business competition

This doesn’t work. Small businesses have a price floor set by their tiny scale and lack of leverage with suppliers.

Costco isn't a grocery store, it's a retail bulk warehouse. Shopping daily at it makes little sense, nor does shopping daily at a small store for items at a higher price for most incomes. Good urban design would place it further away as it's a destination shopping trip intended less frequently. Public transportation would have more storage space for bags and either a public or store delivery service would get larger items home.

You should be hoping that Costco stays in business and large every day grocery stores (Kroger, Target Grocery, etc.) don't last.

I think about this a lot as an avid lover of Costco.

I'm fortunate enough to be able to travel by PEV/Bike to one but there's another Costco near me which is assailed on all sides by freeways and would be impossible to reach by anything other than car.

We (family of 4) shop at Costco every 2 weeks; get all of our staples, fruit/veggies (we eat a lot of that and they have a very good selection of organics), cheese (good selection, much cheaper than other stores); great deals on wine too, and sometimes beer when they carry our craft beer of choice (our local Costco has a lot of nice craft beer), dog food, etc. Some favorites we don't find elsewhere at that quality/price are the Kirkland organic tortilla chips, toasted seaweed (kids' favorite), organic flour tortillas (freeze them and they last), roasted almonds, dried fruit (figs, apricots), reduced sugar fruit spread, etc. For a big wholesaler we find they have a very good selection of healthier food (as healthy as you can get in the US, but that's another story), at least in our city. I find the layout to be pretty consistent and we know where to go to get our regular purchases. Often along the way we'll see something we haven't tried before and get that, though you do sometimes find that they stop carrying it, or it was seasonal, but I can live with that. What we don't buy there is meat, fish, milk, eggs, all of which we buy at local grocer (sourced locally), plus we're not big meat eaters and don't want to fill up a freezer with it. Besides that, we get some specialty stuff at Trader Joe's (a nice place to shop and the best checkout staff ever -- I think they attract the right kind of employees, a bit like REI). And that's about it. None of those companies are perfect but I feel like they pay and treat their employees well. We shun Safeway/Albertsons/Kroger, and don't get me started on Walmart. I truly hate Walmart for having destroyed so many US towns--will never give them my money.

What's with wrong Safeway? I much prefer shopping there over Costco. Going to Costco is a stressful unpleasant experience starting from the insane parking lot filled with oversized vehicles. The inside is a dimly-lit warehouse packed with zombie-like shoppers making a b-line behind their oversized shopping carts for the overrated kirkland toilet paper (yep I said it!)

A grocery store like safeway I find much more relaxing and laid back and doesn't have obnoxiously large quantities & packaging.

That said I've been invested in costco stock for a long time because I recognize the cult-like devotion of their shoppers.

>I truly hate Walmart for having destroyed so many US towns--will never give them my money.

This makes no sense when the reason it “destroyed small towns” was by attracting the same shopping you do at Costco.

WalMart has ~10x the stores as Costco across the US. Costco exists primarily in large metro areas and attracts shoppers who buy in bulk (including many small businesses, not your average grocery shopper), and focuses on a much narrower range of products. By setting up shop nearly everywhere and selling pretty much everything, Walmart eviscerated small towns in a way that Costco did not.

Plus, the way WalMart compensates and treats its store employees compared to Costco is night and day.

I like their curated inventory model, and focus on quality, value, bulk sizes, etc.

It's almost a stake in the heart of consumer marketing and retail, which seems to be all about bamboozling customers with endless new products or packaging, and dressing up staples with new marketing angles or features, eg 'marine hydrocolloids' or whatever the latest BS in cosmetics is, before that 'microbeads' (aka glitter), etc.

This is from June, 2018. (That should be in the title.) I'm curious how the last five years have been for Costco.

Looks good: https://www.macrotrends.net/stocks/charts/COST/costco/gross-...

And the stock is now at 563 so more than doubled in 5 years, not too shabby.

Being crushed by Amazon’s purchase of Whole Foods certainly didn’t come to pass, that seemed to be the big threat this slide deck was discussing, no doubt in response to some talking heads over on the financial channels who’s hair was on fire because Amazon was going to outcompete all grocery stores and drive them out of business, even Costco.

It seems like a decent slide deck, but what's the deal with this anonymous blog with the odd domain name?

That’s how the Internet was before corporate inundated shit and “real name” social media.

The age of this article is very apparent with the continued discussion of Amazon’s purchase of Whole Foods. If that was supposed to be a massive shock to the grocery business it is a long time in coming. Most people forgot it even happened with how little it changed the world.

> customers prefer the convenience of shopping online

Things have actually been flat for ~3 years now https://fred.stlouisfed.org/series/ECOMPCTSA

Our nearest Costco (Wembley in London) has an ophthalmology section that does eye tests as well as (competitively priced of course) eye glasses. That's some confident branching out from the traditional retail domain.

For the past year I've noticed their cashiers are oddly hostile. I've just not been digging the vibe of the store lately. I pay $60 for membership. You don't need to treat me like a potential criminal who may be using someone else's card.

Anyway, I have two Discover cards (0% apr for 12 months) that gave me 10% cash back at Costco.com. I purchased $3000 worth of Costco giftcards & will be using them in lieu of membership in the store when mine expires (a little known store loophole). I'd like to think it's in the spirit of Steve Jobs leasing cars for one month at a time to avoid license plates.

And you wonder why they turn hostile, pay the $60 fee you cheapskate.

A cashier will never speak down to me. As god as my witness I will crash this company with no survivors.

I'm not sure what you are hinting at by saying "like a potential criminal who may be using someone else's card." Were you using someone else's card or not? Its a membership based store and your card is what validates that status. What exactly was the scenario you found yourself in? maiden vs. married name? Picture scratched up?

It looks like from reviews left that the Costco Shop gift card[1] is a one time use. How they would know that, maybe via system tracking, I'm not sure. It would seem that you would have to have a new card every time you go verse a single card with $3k on it. Other reviews seem to indicate that they check the member that gave you the card which after the first year of renewal you would not be able to show since your membership lapsed.

[1] https://www.costco.com/costco-shop-card.product.10024438.htm...

>I'm not sure what you are hinting at

Where am I hinting at anything? I literally said that "I pay $60 for membership"

The scenario I've witnessed many times in the last year: a cashier screaming at members for not having their card ready/not having an item barcode visible/scrutinizing the tiny B&W photo for any hint of malfeasance. Just an unpleasant experience altogether. They do this because memberships are way down. And if you think it's just me here's a reddit thread

https://www.reddit.com/r/Costco/comments/14fpbjm/accused_of_...

Costco cashiers enjoy the highest pay and benefits for a job that requires little intelligence or skill. For some reason they act like frustrated divas forced to interact with the unwashed masses. Sorry, no. You're an unskilled service worker and wear a nametag. Get over yourself!

Anyway I'm not going to subsidize that. But I'm also not going to give up my rotisserie chickens and $5 gallons of organic milk. I'll get a membership again when the self-checkout machines outnumber employees.

>one time use

Nope. Have used a single card 3x. Also gift cards are highly regulated in my state, what you're describing is illegal

>they check the member that gave you the card

No idea what you're talking about. Been doing this for three months.

I wasn't asking about a reddit thread, I was asking about your experience since you indicated it happened to you. If you don't want to share thats fine I was just curious as quite a few commenters on the thread seem to think that verifying your membership by asking for your card is "being treated like a criminal." I was trying to take other instances into account.

I don't really know how many times you would have to shop at Costco to not know to have your card out. I can understand peoples first time or forgetting but you have to be very oblivious to not notice the process that is happening with the person in front of you and have it ready. This is akin to people waiting in line at a restaurant then getting to the counter and not knowing what they want.

If you went to the link I referenced you would see in the reviews that people were leaving on the Costco site that this was their experience with the gift cards.

>one time use >> Nope. Have used a single card 3x.

Right, because your current membership is still active. Again, if you read the Costco link I referenced the people attempting to use the card were not members and gifted the Costco cards. This will be the scenario you run into when your membership expires.

>>Also gift cards are highly regulated in my state, what you're describing is illegal

Great, then apply your personal knowledge to where you live, clearly its not the same everywhere.

>they check the member that gave you the card >> No idea what you're talking about. Been doing this for three months.

Again because your membership is still active and you are the one that purchased them.

>I was asking about your experience since you indicated it happened to you. If you don't want to share thats fine

I just have written two paragraphs on my personal experience

>seem to think that verifying your membership by asking for your card is "being treated like a criminal."

not at all what I said, but I think you knew that

>I don't really know how many times you would have to shop at Costco to not know to have your card out.

Not addressing my point but again I think you knew that

>This will be the scenario you run into when your membership expires

Again, gift cards are highly regulated in my state. They don't suddenly lose all value contingent on the buyers standing at the store. You're making that up for some reason. Do you work for Costco?

>Great, then apply your personal knowledge to where you live

That's... what I've been doing this whole time, thanks

>I was asking about your experience since you indicated it happened to you. If you don't want to share thats fine

>>I just have written two paragraphs on my personal experience

I see. So you haven't directly experienced being yelled at or having your picture scrutinized, you just observed it happening to other people?

>seem to think that verifying your membership by asking for your card is "being treated like a criminal."

>>not at all what I said, but I think you knew that

I think its disingenuous to cherry pick parts of quotes. I'll list it out again so you see that it wasn't directed at you specifically.

"as quite a few commenters on the thread seem to think that verifying your membership by asking for your card is "being treated like a criminal."

I'll leave it to you to scroll through the thread if you want to see what I was speaking too.

>This will be the scenario you run into when your membership expires

>>Again, gift cards are highly regulated in my state. They don't suddenly lose all value contingent on the buyers standing at the store. You're making that up for some reason.

I think if you read the reviews from the link I referenced[1] there was no mention of loosing the cards value. I said Costco only let them use it once as a non-member. There are a number of different scenarios listed in the reviews that people ran into. If you don't want to read the reviews thats fine, but there is nothing being made up instead you are creating a scenario which wasn't stated. It makes no sense why I would do that and then provide you the link to the source of the information.

> Do you work for Costco?

I pointed you to the Costco site which is where I would go to find out about their policies and because of that I must "work" for Costco now? I was simply pointing out other peoples experiences as "non_members" which you alluded to as your future plan here with the cards.

Here are the reviews incase you missed the link previously, look through the (1) star reviews to see what I was talking about.

[1] https://www.costco.com/costco-shop-card.product.10024438.htm...

>Great, then apply your personal knowledge to where you live

>>That's... what I've been doing this whole time, thanks

Yes and where you live is known to you, not everyone in the thread. We were only granted the illuminating information of cards being "highly regulated in your state" later on in your response post. No one would have known this information prior to that.

>unintelligible, unformatted post

I'm not reading this

Maybe you meant this response for another posting but I never stated the item you have quoted(>) above.

English very clearly isn't your primary language.

In the event you were unaware of this, angle brackets are a form of quoting in markdown and other forums such as mailing lists. Multiple brackets are intended to show threaded conversations.

You quoted a statement that wasn't part of our conversation and seemed misplaced in our thread.

Based on your displayed reading comprehension level it seemed prudent to include the thread since you were unable to piece a few previous sentences together and were mis-quoting previous statements.

I've also decided to break out my sentences so they are easier for you or your screen reader to work with.

I hope whatever bot this is training works out well and can help improve its comprehension levels. Don't get too tired typing one sentence answers today, drink some water and take some breaks.

The problem is that people ARE using other peoples cards. It hurts members who actually paid for a membership, and I don't mind them checking for that at all.

On one slide showed big dip in profit in 2009. What was it? I don't think it was just the 2008 economy downturn.

Let's take a moment to appreciate some excellent minimalist UI of this site and especially the slides on this topic.

Simple.

Clean.

To the point.

According to that site, Costco has 741 stores. And 3 of them are within 10 minutes of me. Noice.

They're up to 855, but 3 within 10 minutes of you (e.g, three within 20 minutes of each other) is pretty darn dense.

But now that I think of it, you can probably get that in Southern California in multiple areas. That's a circle with 314 sq miles inside.

If we're counting 10 minutes as the crow flies, then in the east cupertino/west SJ area, you're probably in range of 8 costcos, including a business center one.

Granted, with bay area traffic, that's more like an hour of driving, but it's still pretty dense.

SoCal? LA/OC?

NYC I'm guessing

I love this format of ingesting information

I can appreciate why Costco appeals to people. I would go maybe 1-2 times a year to pick up a few items. That said, once they started hard enforcing the card sharing policy and then proceeded to literally scream at me that I couldn't use my fathers card, while in line, I decided to not give them my business ever again.

I had used his card a couple times before without any issues. It wasn't even a busy day and I really didn't get the hostility that I received. Certainly, I got some stressed out check out person, but wow... me never going back there again is going to cost them a whole lot more in the long run, than them missing out on my membership fee from my occasional visit.

> me never going back there again is going to cost them a whole lot more in the long run, than them missing out on my membership fee from my occasional visit.

That’s actually not really true for Costco. They famously break even on selling merchandise as a way to sell the memberships. It’s unfortunate but the model really doesn’t care about occasional visitors like you.

Not excusing the attitude, that sounds completely unacceptable, but blocking shared memberships is core to their approach.

I find it hard to believe that they don't profit on their products at least a bit. Certainly there are some they don't get a profit on, but it wasn't like I was in there just buying a cheap tv and walking out... I was buying regular stuff.

Its their model. Its discussed in TFA too.

> I find it hard to believe that they don’t profit on their products at least a bit.

Basically, they don’t. Over recent years, membership fees have accounted for, from what I can find, a low of 80% to a high of 110% of their net income, usually sitting right around 100%, and that’s not an accident, its their well-documented deliberate business model.

Selling stuff covers the costs associated with being able to sell the stuff, membership fees are what provides profit.

Someone above mentions: "Costco has a markup cap of 15%"

Is this true for the obnoxiously expensive ($10k+ in many cases) liquor cabinets they keep?

They sell some items at a loss.

They yelled at you because dealing with 1000 people who think they're special and can break the rules everyday and it's not a big deal is infuriating.

I honestly didn't know they were enforcing the rule because it had worked just fine before. I had no attitude or thinking I was special, I just got immediately screamed at.

So you "stole" from them many times and then were surprised by the reaction the one time you got caught. You just felt justified because you didn't understand their business model.

I usually don't tell people how they feel.

I honestly didn't know it would be a big deal that my dad didn't go with me to the store to buy things.

To be fair, your dad should have. It's in the membership agreement and has been there for a very very long time. Doesn't excuse being yelled at, but your dad should have been aware of this and warned you that they might deny you if you go alone without him.

My whole gripe isn't about getting 'caught', it is about getting literally yelled at.

Well, I think part of the reason you're getting pushback is that you still have a gripe with it. It was a one time occurrence, and despite the employee yelling, they were still correct and you were wrong and breaking the rules if you will.

For a little context, Costco recently started cracking down on the membership 'sharing' and a lot of employees are now being forced to turn away customers, of whom many turn very irate, because just like you they've been doing this for a long time. That employee that yelled at you might have very well been at the end of a shift where they themselves had been yelled at and berated multiple times. As much as we'd like to say that they should be better and not respond in kind, we both know that if you abuse someone enough, they will lash out.

Stop having a gripe with it. Chalk it up as a slightly unpleasant experience and move on.

A gripe is not unhealthy. A gripe here is justified. Sympathy for the employee does not invalidate the gripe.

This is not a situation where you should be telling people how to feel.

Constantly and frequently complaining that a single employee treated them badly is healthy? I must have the wrong understanding of what griping is.

Please look up the noun definition, not the verb definition.

Google says "a minor complaint".

Merriam-Webster says "grievance, complaint".

Thanks for pointing that out. I don't recall the last time I used it as a noun and the completely opposite meaning from the verb and it had slipped my mind. The potentially ambiguous sentence structure combines with that to have me treat it as the verb definition.

So if you take what I said the GP comment there, then I think it's fair, if maybe a little harsh. Of course, assuming the OP meant a minor complaint as they probably did, then your response is warranted.

So perhaps let me restate then -- having a gripe about that kind of treatment is warranted. Griping about it, probably best to just move on and forget about it, less stress.

They can move on and choose not to shop at Costco at the same time. Two wrongs don't make a right and I would be frustrated by that experience.

Frustrated, sure. I wouldn't be griping about it though, I'd move on.

(I also wouldn't stop shopping somewhere just because one employee had an outburst about something that they're being forced to do and is causing negative interactions with customers. Sure, I won't feel good about it, I might complain to management, but at the end of the day that one short interaction has so little bearing on my life that it's not worth constantly remembering and bringing it up.)

Ehh, a gripe online years later isn't the same as it living rent free in your head. I think that's our contrast here. I doubt that commenter's history is full of commenting about Costco. You have random events happen and certain topics can remind you, even decades later if you've otherwise forgotten.

> I might complain to management, but at the end of the day that one short interaction has so little bearing on my life that it's not worth constantly remembering and bringing it up.

Might not have much bearing, but it would be memorable. Experience varies but people simply don't yell at me. If the town is small enough you may simply want to avoid that interaction ever again and not bother stepping on eggshells.

> Ehh, a gripe online years later isn't the same as it living rent free in your head.

I was misunderstanding the OP's usage of gripe, and with my understanding being corrected, I largely agree.

> Might not have much bearing, but it would be memorable. Experience varies but people simply don't yell at me. If the town is small enough you may simply want to avoid that interaction ever again and not bother stepping on eggshells.

From my experience living in a small town, unless it was a constant occurrence it would still be pretty quickly forgotten; As you said, experience varies -- I grew up in a place where cordiality and hospitality from retail workers was not the expectation, and having a worker be mildly rude or sarcastic to you would be a common occurrence. So I've kind of internalized being able to just brush that kind of stuff aside...mostly.

You aren't "giving them" your business. They don't want your business if you don't have a membership.

It would be like saying I'm not giving Netflix anymore of my business since they won't let me use my dad's password.

Different with Netflix, you don't buy actual products that they also profit on.

Not with their new advertiser supported plan ;)

> Different with Netflix, you don’t buy actual products that they also profit on.

You don’t do that at Costco either, except by accident: Costco by design breaks even (there’s some variability because planning and reality diverge) on everything else and makes money on membership fees. That’s the value proposition: you pay for a membership, and you get stuff at what it costs Costco to get it to you.

Costco electronics are often times priced very similarly to Best Buy and any other major retailer (see for example Apple MacBook and iPad, which are items that I regularly happen to buy every few years so I actively keep an eye on their price trends). If Costco is breaking even on them, are you implying that also the other retailers are? Otherwise, are they not, actually, just breaking even on every item? Tons of people buy their Apple electronics at Costco, so I have to assume it is a significant percentage of their revenue.

Can't speak for all tech, but I think Apple has very careful price controlling on their products. I wouldn't be surprised if retailers don't make as much on them but keep them to draw shoppers in.

For other tech, it's up in the air. Maybe Costco does make a profit but not as many people buy tech at Costco than at Best buy, for instance.

> Costco electronics are often times priced very similarly to Best Buy [...] If Costco is breaking even on them, are you implying that also the other retailers are?

They break even in aggregate across everything that isn't memberships, but there is a bit of variability in margin, so, maybe, maybe not.

OTOH, brick and mortar electronics retailers have for quite a while had narrow margins and pushed things like high margin extended warranties to make profit (or, for the vast majority of them, just gone out of business.) Costco includes an extended warranty with purchase.

> Tons of people buy their Apple electronics at Costco, so I have to assume it is a significant percentage of their revenue.

Probably not. Apple electronics are big ticket items, but people aren't buying new iPhones or MacBooks all that frequently. The revenue from a person buying a MacBook and iPhone every other year is dwarfed by that of a person buying groceries every week.

So you were not a member and tried to use their services but they gave you a hard time? That's like getting kicked out of Disneyland using someone else's ticket and complaining that they're not taking your business. Costco makes the bulk of their profit from membership fees so you not getting to use their members-only service is exactly what they want to enforce.

>then proceeded to literally scream at me that I couldn't use my fathers card

https://tenor.com/view/doubt-press-x-press-la-noire-gif-1871...

The slide deck talks about how they break even on sales, and make their profit only on the membership fees.

Interestingly, there was a bit in there about (deck dated 2018) "27% of all US households are cardholders".

But I don't know why the employee screamed at you. I can understand you not wanting to return to a store where that happened.

> Interestingly, there was a bit in there about (deck dated 2018) "27% of all US households are cardholders".

That is hard to believe.

Not acceptable that you got yelled at, but it's a bit like using someone else's ski pass; you'd get kicked off the mountain (and probably yelled at).

Their business is the membership, not profits on merchandise.

The entitlement in this comment is astonishing by any standards. Truly something to behold. I'm amazed someone lacked the self-awareness to consider posting something like this not only acceptable but even as a sort of call for sympathy. You will not be missed, neither by Costco nor by paying members.

I'm skeptical a Costco employee 'literally screamed' at you, that's grounds for getting fired. Per Occam's razor, I think it's more likely you're not used to people confronting you when you're in the wrong and this often gets misunderstood as 'hostility'.

> even as a sort of call for sympathy.

No call for sympathy, at all. At the end of the day, it is a box store. Nothing more, nothing less. It really isn't that big of a deal... I just won't go back. ¯\_(ツ)_/¯.

> I'm skeptical a Costco employee 'literally screamed' at you, that's grounds for getting fired.

Fine to be skeptical, but it happened.

> It really isn't that big of a deal... I just won't go back. ¯\_(ツ)_/¯.

Why bother spending the time making a comment and subsequently replying to other comments. These actions seem to conflict with what you are saying.

I thought I was sharing an interesting story and different perspective on things. Which did generate a lot of comments and feedback. I don't take the rather negative stuff said here personally and I learn and grow from these things. The feedback, good and bad, I've gotten on HN over the years has helped me a lot at a personal level. It is part of the benefit of speaking up on this site.

Fair enough. A constantly tuned feedback-loop is certainly worth the effort. All the best.

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