Costco has to be the single best retail business in the world. A new Costco just opened in area and I signed up for their ‘executive’ membership card, which is something that I feel wholly ridiculous — but I did so nevertheless.
In order to attain the privilege of shopping there, customers must pay an annual fee. In an era where every retailer is tripping over themselves to attract customers, this concept isn’t dually brilliant and absurd.
Their private brand, Kirkland’s, has also attained legendary status — viewed by many as representative of value and quality. A new engine of growth for Costco is now enjoyed in wine, beer, and spirits.
Last year, alcohol brought in $3.8b, half coming from bullshit wine. This business has grown by 46% over the past 5 years, outpacing food and sundries.
“Private label continues to grow as a dominant strategy in retail — especially when it migrates from being a ‘label’ to more of a ‘brand,’ which Kirkland has done,” said David Bassuk, managing director at consulting firm AlixPartners in New York. “Now it’s a well-known name and gives the consumer a perception of value and a good deal.”
The reason for their success lies in the perceived value. The company only marks up prices by 10-14% compared to industry norms of 25-40%.
“They’re doing the opposite of looking to cut corners,” he said. “They’re looking for maximum quality and minimum markup to drive value for the member.”
Other retailers like Whole Foods, Walmart, and Target have entered the private label business for booze too and have enjoyed success, thanks to America’s proclivity to drink themselves into stupors. Even still, Costco is widely regarded as the winner in this high growth space — clawhammering local liquor stores into a thousand pieces wherever they encounter them.
Both the stock and revenue/earnings trends have been steady eddy, in spite of an overall lackluster retail environment.
Ancillary beneficiaries are $STZ, $DEO and BF-b.
Happy pre St. Paddy’s day.
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Try Kirkland’s small batch bourbon. You won’t regret it.
Due to Arizona liquor law, no membership required to purchase at COST. Lagavulin 16yr for $69.99
Has anyone out there found it cheaper??
I didn’t know this UncleBuccs, and Im a resident. However I buy other shit there anyway…
Keep that card in your pocket next time, just for the thrill of it….
I like that. Living on the edge
I always pocket the card. In Roseville (lower class suburbs) they’ll actually chase you down. Good fun.
Indeed. I don’t go to their stores, but i buy Kirkland stuff on Amazon.
I’d imagine whole foods has booze for like $100 a pint and it’s organic.
You can pound half a bottle of grey goose and step over to the next counter and buy a tractor. Love this place.
Why can’t I post under my formerly-banned “Purdy” ID on your blog, but I can on other IBC blogs. I feel slighted.
Costco seems to be killing it in Japan too. Large format hooch aisle is well travelled. You can even buy a Rolex there! (Milgauss JPY780,000 , approx. US$6,900).
You have to get the executive membership vs basic. With basic most people are probably leaving money on the table. If you spend $2800 a year or more you come out ahead vs paying the regular membership fee. Not hard to do that at all.
Grab some of the prime rib eye steaks next time you are there. The web site stocks more expensive stuff they don’t bother sending out to the stores too. They had Kobe beef rib eyes from Japan (never frozen and orders of magnitude better than the American Wagyu crap others sell as Kobe beef in the US) shipped overnight to you at $75 a pound last year if you were willing to buy a 12 pound slab. The cheapest I’ve ever seen the same quality is $95 a pound at some Japanese grocery stores in the US.
And the best part is when you travel and get to see what the local Costco’s carry that is different than your hometown one. Probably 20% of items are sourced locally by the stores and varies. If you vacation in Maui and are renting a condo, the Costco there has everything you need for your vacation and is right near the airport.
Maui Costco is the best! fantastic poké and cheapest gas on the island
Takes a mutt Irishman to know those keg sized bottles of booze are bad news. Gone are the days of the paper bag. Fucking trash bag needed to haul out those atomic bombs. When do the 10 feet long cigarettes hit the market. The 100 pigs sliced into “family” sized bacon is already available. Costco will kill you one way or another.
They sell water by the shitload too. People are idiots. A guy I work with drinks 2+ gallons of water a day and that’s just at the desk job.
LOL you’re fucking killing me man !
Tru dat. I never but liquor from them – too much poison for my cabinets. Unlike Fly, I’ve never been particularly good at letting it sit. Plus we gotta get up early as shit to watch the markets on this side.
Dr. Fly, check out the tall Kirkland Vodka made by the Grey Goose folks in tall 750 ml bottles for $20. You will not regret purchasing them.
Try the Kirkland Signature American Vodka at $14 for .75L
I’m told it’s white label Titos for less than half the price.
I live in a fucking ‘dry town’ in NJ and they are not permitted to sell booze. Google the amount of dry towns left in America. Fucking astounding.
You’re not kidding about wanton alcoholism. Many Americans are killing themselves with alcohol and cigarettes, and they are harming those around them.
Although it makes me somewhat nervous, this story made me smile-
https://www.bostonglobe.com/business/2017/03/16/lack-oxford-comma-costs-maine-company-millions-overtime-dispute/BIxK837fA2C06qavQMDs5J/story.html
Get my liquor from there too… 1.75 liters bombay sapphire- 22.99 hot damn! Ha
Costco is great. I used to live in Kirkland (of the brand name) and live pretty close to one now. We get that poke here and its always hard to not buy that $5 chicken.
Any ever try their travel?
Anyway, I think if they can step up their Internet game they could rival Amazon in some ways down the line.
You think by delivering, cutting the membership fee in atleast half would be a start?
Haven’t booked any of their vacation packages, but I always use it for rental car deals from alamo/avis/budget/enterprise when traveling. They are the cheapest and even beat the no name rental car companies and they have a great web interface that easily lets you book and cancel.
After remaining one of the holdout ‘dry’ towns for a couple of centuries here in Ohio, we now allow booze and actually have our own brewery in town for the bourgeois.
And playing on the investing in alcoholism thesis, Amazon Prime Now offers liquor delivery to our doorstep here in Central Ohio even with Costco just 15 minutes down the road.
Too inconsistent. The place is like a bulk-purchase yard sale, or liquidation operation. The “store brand” is no different than any other private label crap. I predict you will not renew membership.
The Kirkland 3 year Tequila is very good. High end Mexican only brands that can only be purchased in Mexico are better but I found this to be very good. Good enough to sip. Excellent in Mexican Mules if you like to mix. I’ll have to try the small batch Bourbon, I spotted that last time and hesitated.
I’ve been an Executive Member of this elite shopping institution for almost 10 years. Welcome to the club, sir.