The Ledger
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Walmart controls over 20% of the US grocery market
“So Walmart has over 20% market share of us groceries. Kroger has under 10% and then Albertsons and Costco are tied at five percent each.”
Gilbert: Costco turns inventory in 27 days, financed by vendors
“On average, it takes them
27 days to sell through their entire inventory, which means that's on net 30 terms, three days of grace where the inventory is actually financed by the vendors and then some.”
Gilbert: Trader Joe's and Costco each stock only about 4,000 items
“Trader Joe's and Costco both only stock about 4000 items at a time.”
Rosenthal: Historical fair trade laws banned selling below manufacturer-set minimum prices
“There are a set of laws called fair trade laws that impact Everything that retailers sell in this era. It's actually kind of crazy. It's a holdover from the depression. We talked about it on the Costco episode where it was illegal for retailers to sell goods b…”
Costco's founders visited a Canadian IKEA for inspiration before launching
“And actually, I happen to know, the founders of Costco made a special trip up to one of the Canadian Ikeas, even before the founding of Costco, because they had so much respect for IKEA as a brand they admired. They, like, wanted to go and see it and experienc…”
IKEA's gross margins sit in the mid-30s versus Costco's 13%
“Ikea's gross margins are, like, mid-thirty percent, and Costco's are 13%.”
Ben Gilbert: Apple and Tiffany lead retail with $5,500 and $3,000 sales per foot
“Costco is 1800 dollars a foot. They are trying to maximize their dollar per foot. Walmart is about 600. Target is about 450 dollars. And then these, like, crazy businesses, just to compare it to the all-time greatest, Tiffany is 3000 dollars a foot for jewelry…”
Costco maintained credit card exclusivity with American Express until 2016
“And this actually continued until 1991 for many of their merchants and for Costco, Went all the way to 2016, where they had the exclusive agreement with, ah, Amex, and if you were gonna use a credit card at Costco, it had to be Amex.”
Costco operates on negative working capital by paying suppliers after selling merchandise
“They make the suppliers wait until they've been paid, and then they're scheduled to pay only after they're scheduled to sell.”
Roughly 25% of Costco's SKUs are rotating, non-staple treasure hunt items
“And so today I think about 25% of their SKUs are these treasure hunt items.”
All three CEOs in Costco's history previously worked at FedMart
“There have been three CEOs in the history of Costco. Saul Price, Jim Senegal, Craig Jelinek. All of whom worked at FedMart.”
Over a third of Costco's US employees have decadelong tenures
“So if you look at Costco today, 36% of U.S. Employees have over 10 years of service.”
Nearly all Costco executives have tenures exceeding 25 years
“If you look at their executive team at Costco today, Basically, all of them have been there for over 25 years. The only vice presidents at the company who have not are the digital e-commerce people that they had to bring in to address some issues.”
Costco turns its inventory 12.4 times yearly compared to Walmart's 8
“Costco actually turns their inventory 12.4 times per year. And just for comparison, Walmart turns their inventory eight times per year. Home Depot is more like five times per year.”
Costco achieves a 93% annual member renewal rate in the United States
“93% of members in the U.S. Renew every single year.”
Costco generates over $730,000 in annual revenue per employee
“And this is why they generate over 730,000 dollars of revenue per employee.”
Kirkland Signature is capped at a 15% markup at Costco
“The only exception to this is Kirkland Signature, where they cheat a little bit and let themselves go up to 15%.”
Costco is the world's largest seller of fine wines
“Costco is the largest seller in the world of fine wines. Fine wines are defined as 20 to 300 dollar bottles.”
Costco sells one-third of all jumbo cashews globally
“They sell one third of the jumbo cashews in the entire world.”
Costco is the third-largest retailer in the US behind Amazon and Walmart
“And you're the third biggest player in the largest market, you know, America, behind Amazon and Walmart.”
All 160 Costco market and country managers meet at headquarters every month
“All of their market managers and country managers come to headquarters for two days every single month. So no matter what market you manage, you fly to Issaquah. That's a 160 people. To all sit in a room for two days and just talk about what's working, what's …”
Costco has never conducted an employee layoff in its corporate history
“The company has never done a layoff.”
Costco has grown revenue roughly 10% annually for over 30 years
“Costco has grown revenue right about 10% for over 30 years in a row.”
Membership fees historically account for 70% of Costco's operating income
“It is accurate to say that membership fees represent about 70% of the company's operating income, with the other 30% of the profit margins coming from retail. It's been a little bit more than 30% in recent years, but that's sort of the historical split.”
Costco maintains a remarkably low 7% workforce attrition rate after year one
“After the first year, Costco today has only a seven percent attrition rate among their workforce.”
Costco has decreased its warehouse SKU count to just 3,800 items
“Costco in the last 10 years was around 4500, and then they sort of looked and said, can we bring it down and went to 4000? And today they're sitting at 3800. So this number is still going down, not up.”
The typical Costco shopper earns $125,000, roughly 70% above the US median
“There was an independent research firm that found that the typical Costco consumer makes about a 125,000 dollars a year in household income and has a four-year degree. Walmart, by comparison, has a median income of about 80,000 dollars. And keep in mind, the m…”
A $10,000 investment in Costco's 1985 IPO generated a 330x return by 2023
“If you bought 10,000 dollars of shares in their IPO in 1985, you would have 3.3 million dollars today, a 330 X, and this does not include the dividends you would have earned along the way, which they've actually done a lot of dividends, including four-ish spec…”
Costco sells 130 million hot dogs globally each year
“They also sell a hundred and thirty million of them per year.”
Walmart operates at 24% gross margins, between Costco's 13% and Target's 30%
“If you look at Walmart's twenty-four-ish percent gross margin, so that's basically what they get from the goods that they sell on the shelf, you see, ok, it's less than Target, which makes 29 30% of anything that they sell on the shelf. Well, Costco's gross pr…”