Daniel Bernards

Austin Hutcheson

Nicole Stefanek

Company Overview Costco operates an international chain of

membership warehouses, mainly under the “Costco Warehouse” brand name

Headquarters are located in Issaquah, Washington and employs about 142,000 people nationwide

Provides a limited selection of nationally branded and private-label products across a wide range of merchandise categories at lower prices than competitors

Known for their bulk merchandise

Company Overview Recorded revenues of $72,483 million in

the financial year ending in August 2008 Net profit was $1,282.7 million in the same

financial period Size of stores range from 70,000 to

205,000 square feet Carries an average of about 4,000 active

SKU’s per warehouse, compared to competitors averaging about 40,000 to 140,000 SKU’s

Primary Merchandise Offerings Broad categories include:

Sundries, hardlines, food, softlines, fresh foods

Besides branded products, Costco offers a range of private label products under the brand name Kirkland SignatureVarious categories: juice, cookies, coffee,

tires, housewares, luggage, appliances, clothing, detergent

Other Retail Formats “Costco Home”

Offers home furnishings and décor products including window treatments, carpeting, and cabinetry

Locations: Washington, Arizona “Costco Business Center”

Customized products for food service, convenience stores and offices

Office supplies, furniture, machines and break room supplies, convenience store supplies and resale items, espresso shop/stand supplies, restaurant supplies, equipment, and ingredients

Strengths Strong market position

5th largest retailer in the US and 8th largest in the worldRanked 29th in the Fortune 500 list of America’s

largest corporations based on sales Rapid inventory turnover rate

High inventory rate reduces cost and shrinkageIn 2008, inventory turnover rate was 12.8, compared

to its competitors:○ BJ’s Wholesale Club 9.4○ Wal-Mart 8.3○ PriceSmart 8.9

Low Marketing Costs

Weaknesses

Concentrated presence in California27% of net sales in 2008

Lax quality controlPurchases from foreign and domestic

vendors gives them limited control over the quality of the products

Opportunities

Growth in online retailingRetail spending in U.S. was $128 billion in

2007, and is expected to reach $215 billion by 2012

Shifting of consumer demand towards private label productsThe purchase of high priced items has

shifted to affordable private label products

Threats

Impact of intense competitionWal-Mart’s Sam’s Club, BJ’s Wholesale

Club, and Target

Consumer confidenceEconomic slowdown in the global economyAffects the discretionary consumer spending

as consumer gets cautious about job security and debt level

Sources

http://www.costcoauto.com/default.aspx

http://www.costco.com/

http://www.suncoraz.com/images/PICT0151_000.JPG

http://static.px.yelp.com/bphoto/cY32swx8bHTFnn13mJnlOw/l

http://www.youtube.com/watch?v=3LR7ZhdGXXg