Will Holtz on LinkedIn: I’ve now seen the most bearish signal for the consumer. Costco… | 32 comments (2024)

🍌 Do you like bananas? 🍌 Costco Wholesale just increased ⬆ the membership fee by 8%. It will take a year 🔃 for everyone's renewal to take place at the higher price. This will add about $370 million dollars in revenue by this time next year. Costco's market cap was about $392 billion at the close, today. Even if you take the $370 million of additional revenue from this increase and multiply it by 10 ‼, that is only $3.7 billion 👀 over the next 10 years... less than 1% of the market cap at close today. Yet, the stock is up almost 5% 🤯 in after hours trading... Almost $20 billion of market cap added based on $370 million of annual sales. 🍌 That. Is. Bananas! 🍌 #stocks #costco #stockmarket #bananas

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Costco is King (of grocery), and I finally returned after 8 long years. Here are my 3 observations on how it's held onto the crown:1️⃣ Paradox of Choice: It's the idea that less is more. The phrase was popularized by Psychologist Barry Schwartz. He argues that although many options can initially seem positive, it often increases stress, anxiety, and dissatisfaction. Costco has mastered this concept. 🌭 Food court - Choose a $1.50 hot dog or a giant pizza slice🍓 Freezer - Kirkland Organic Berries or Random Other Brand Berries 🐮 Fridge - 90% Lean Kirkland Burger Patties or 85% PattiesFewer Options > Analysis Paralysis 2️⃣ Kirkland, their private label brand, is EVERYWHERE. Reason being, customers love it and Costco makes better margins.Kirkland makes up about 1/4 of Costco's revenue and is actually America’s biggest consumer packaged goods brand measured by sales. It’s larger than Hershey(HSY), Campbell Soup(CPB)or Kellogg(K).3️⃣ Cheap, Cheap, Cheap - Costco has a different business model in which it makes money through tiered memberships, and saves money by buying in bulk, having fewer products SKUs (3,700 vs. 10,000), and pushing its private label. As a result, products are cheaper. 1️⃣ + 2️⃣ + 3️⃣ = Best Grocery Store EverAnd, an incredible stock too, with a return of 2,300% over the past 25 years.***P.S. I started a newsletter called The Closing Report. Check it out if you're a fan of creative sales strategies, inspiring stories, and random recommendations -https://lnkd.in/gyeXBD_B

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❓ What is “Costco Love” and are you part of it?👉 According to the Sunday Times it’s one of the groups on social media where shoppers share their favourite finds of the week at the members-only warehouse stores and it’s getting a cult-like following. 📰 The paper spoke to my colleague Nick Carroll to find out what’s driving the growth in Costco Wholesale's popularity. 🗨 He notes that 17% of Brits have shopped at the warehouse retailer in the past 12 months, and “…those from higher-income households, earning above £75,000 a year, are more likely to shop at Costco than those on lower incomes – so this is not just about value but about being savvy.”🛒 Have you shopped at Costco, and what has your experience been? 💡 Read the article here (£): https://bit.ly/49snMfo#retailing #retailnews #consumerbehavior

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Walmart, Sam's Club and Costco Wholesale continue to gain market share of the grocery business as all traditional grocery chains lose share to them. Walmart now holds a 21.4% market share, an increase of 0.6% from the year before when it had 20.8%. Costco moved from 7.9% to 8.3% and Sam's Club increased market share from 4.2% to 4.3%. The second highest holder of market share after Walmart is Kroger, which holds only 8.9% share, down from 9.2% last year. All this is according to recently released Numerator data.

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Walmart, is gluten-free muffin mix and oat milk ice creamreally in your customer's sweet spot? As America's largest grocery retailer starts their journey in attracting higher income shoppers, they've introduced a premium line called Bettergoods. 🥑 Adding 300 Bettergoods brands like cardamom rose raspberry jam & curry chicken empanadas🥑 Going after Costco Wholesale, Whole Foods Market & Trader Joe's🥑 Their Sam's Choice products will shift to their 4000 generic Great Value private label products to create less confusion with the customerBottom line, low margin weekly grocery visits create many more customer "eyeballs" on their higher margin general merchandise, electronics, pharmacy, and many other categories. Target might do themselves a favor by concentrating more on their grocery business. Walter Holbrook Myron K. Burke Brand L. Elverston Brandon Rael RETHINK Retailhttps://lnkd.in/eejqt4WG

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Costco Wholesale 𝗶𝘀 𝗡𝗢𝗧 𝗰𝗵𝗲𝗮𝗽!Ever noticed how Costco isn't just about affordability but a strategic mind game? Sure, their prices are moderate, but the catch is that you're buying in bulk. While Walmart may offer similar items at lower prices, Costco's marketing mastery is what sets them apart. They've masterfully crafted the perception that their profits don't come from product sales; they earn from the yearly membership subscriptions. Plus, who can resist their famous rotisserie chicken and $1.50 hot dog combo? It's all part of the psychological game that keeps customers coming back. As for many people, $𝟵.𝟵𝟵 𝗶𝘀 𝘀𝘁𝗶𝗹𝗹 $𝟵, 𝗻𝗼𝘁 $𝟭𝟬!#Costco #marketingmastery

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Costco is reporting great grocery sales. If you are in retail do you remember when Costco first made it on your radar? Are "non-core" retail channels underestimated? In my experience, food and Rx retailers describe their market conditions with a look at a very specific, like-for-like list of competitors, and usually only top players. There's a danger in ignoring the threat of non traditional channels, smaller companies, and independents. There's also a tendency to overstate victories in market share gains made against large competitors.

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Retail Today / Retail Renaissance: Costco’s not so secret weapon, “Kirkland Signature”, the private label powerhouse. The envy of the retail world! #costco #kirkland Yes, WalMart has their new premier line “Better Goods”, Target’s “Good & Gather”, even Trader Joe’s and Aldi are known for their private brands. #walmart #target #traderjoes #aldiBut nothing comes close to “KIRKLAND”, this asset is worth $60 Billion Dollars in sales a year! 💥See attached, it’s a “who’s who” of vendor partners. From nuts, to socks, water, wine, apparel, peanut butter, olive oil to booze. #vendorpartners #apparelindustry“Kirkland Signature” spirits, gin, vodka, bourbon, whiskey, even single malt whiskey from Scotland. Costco is the largest seller of alcoholic beverages in the U.S. at $7 Billion Dollars! Costco’s business model just keeps growing stronger, with a people-first mentality and product driven. With 876 stores worldwide, producing +$260 Billion Dollars in sales. #peoplefirst #product PEOPLE - PRODUCT - PRESENTATION - PROCESS = PROFITABILITY Sales Trend: 🔥🔥🔥February +5%March +8%April +6%#retail #retailtrends #retailindustry #groceryindustry #wine #spirits #shoppingexperience #privatelabel #TopRetailExpert

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Customer-centric capability is a competitive advantage. Costco understands people. They understand the business they’re in. It is not “wholesale” or “retsil”, which are superficial definitions that everybody else uses. It is no surprise that they also have a very low (perhaps the lowest) people turnover. Which means people like working there. It is not the assets they have. It is how they use them.It is not about the products but about what they mean for people when they shop there. It is about trust and perceived value. Why else would people pay a fee in advance just to have the privilege to step into their warehouse?They understand people. Better than the rest of options for consumers. And that, in my view, can be a competitive advantage. Reposting an insightful post from Walter Holbrook What do you find distinctive about shopping at Costco?#marketing #branding #management #mentoring

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🛒 Costco Wholesale is increasing membership prices 💰 for the first time in 7 years . +$10/year for executive and $5 for standard, at 52M members across both at roughly 50/50 split is $7.5*52M = $390M of incremental revenue. Assuming the price increase doesn't cause increased churn...which it probably won't to any meaningful extent as the price increase is relatively small to any individual/family (especially so given Costco's typical higher HHI customer), there's no real good substitute, and it's shockingly sticky. This is the rough equivalent of: 🌭 🥤 Raising hot dog & drink combo prices from $1.50 by $2.00 to $3.50. 200M hot dogs/year *$2 = $400M. 🐔 Raising rotisserie chicken price from $4.99 by $3 to $8.99. 137M chickens/year * $3 = $411M. ^^Doing any of the two above would cause catastrophic insurrections of Costco fans but no one is really going to bat an eye at the $5-10 membership price increase. Great move. #pricing #retail #costco #strategy

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