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Haven't read the piece yet, but I definitely will - for a long time I would like to understand why people are so enamored with Costco. I recently joined because

by lbrito 4y ago

Haven't read the piece yet, but I definitely will - for a long time I would like to understand why people are so enamored with Costco. I recently joined because they have some good food that is hard or more expensive to find elsewhere, but that's about it. To me it's just a store. Outside of the US/Canada I've never seen people evangelize a store so much.

kvark 4y ago
For me, it’s a modern equivalent of the soviet stores. There is no 10 kinds of everything, but the ones available are guaranteed to be fairly good quality and at an affordable price. Speaking more modern, it saves the mental effort of researching choices. Need something? Check Costco, buy if there, done. Of course there are negatives associated with them, too.
- el-salvador 4y ago
  PriceSmart, (Costco's Latin American cousin), does something similar too. They research/test the products before selling them so that they comply with their quality standards. So once products are on the shelves its likely that they are good. This make buying decisions easier. Which is a much better shopping experience than having to read a dozen product reviews while shopping online.
- inferiorhuman 4y ago
  > the ones available are guaranteed to be fairly good quality and at an affordable price I bought into the hype and got a Costco membership a few years back. One of the first things I went looking for was whole bean coffee (Peet's xmas roast). The local Costco had a bunch of coffee from Starbucks and Peets (meh quality to start) but only the painfully dark roasts and all of it was ground. Pre-ground coffee in bulk has a pretty limited use case (and relatively short shelf life). Fast forward to last week and I went looking for a new fridge at Costco dot com. They prominently featured LG (ugh) and Samsung refrigerators. While some LG models seem to review pretty well I've never seen anyone say anything positive about Samsung, their service, or the serviceability of their appliances. I'm in the middle of dealing with a defective LG fridge and that's about the nicest thing I can say about LG's warranty and customer support. Costco may have a permissive return policy and decent customer support but I would never blindly buy something without doing a bit of research just because it's at Costco. Especially with a big ticket item like a fridge I'd rather use my Amex anyhow.
  - iudqnolq 4y ago
    My experience is the big ticket items are all fine products at normal prices, but there's no reason to pick Costco for them. I suspect it's where they make a lot of their profit, considering their groceries are famously low margin. I buy groceries and gas exclusively there.
    - shaftway 4y ago
      I strongly suspect it's the extra services that third parties sell through them. Like the vacation packages, air conditioning installation, etc. We almost got a Puronics filter through them, but stopped short when we found out that it was $9000 at Costco, but $6000 through an independent installer.
      - lotsofpulp 4y ago
        Costco’s profit is all membership fees. Everything else is (in aggregate) sold at cost. This is public information in their 10-K filings. For the hotel and travel stuff, they get a commission like other travel agents/channels.
    - gambiting 4y ago
      Here in UK the #1 reason to get them from Costco is that they give 5 years warranty on all electronics and home appliances, way beyond what the manufacturer offers. I'd happily buy a new TV or a fridge from them for that reason alone.
    - lotsofpulp 4y ago
      The reason to pick Costco for appliances is because you get a 4 year warranty if you use Costco credit card (in the US).
    - mikebonnell 4y ago
      Almost all of their profit is from membership fees. https://investor.costco.com/node/24021/html https://investor.costco.com/node/24021/html Sales almost equal merchandise cost plus selling expenses. Membership fees add $984 million on top of that.
- rexf 4y ago
  Yeah, Costco has OK selection and OK/good prices. The downside for groceries is the bulk sizing can be much more than you want to buy. Their return policy is also very good. Obviously do not abuse this (or you are being a jerk). This means you can buy things without hesitation since you can easily return it should you run into an issue later.
- mantas 4y ago
  > soviet stores > but the ones available are guaranteed to be fairly good quality Yeah, right... Nope.
- badpun 4y ago
  > soviet stores. (...) but the ones available are guaranteed to be fairly good quality and at an affordable price Must be different soviets that I lived in. The quality was often terrible (e.g. "chocolate" that did not contain cocoa at all, ugly clothes and shoes that would break down quickly, beer that tasted like piss etc.) and that is assuming the goods were in the store at all. Basic western goods, such as Levi jeans or can of Coca-Cola were celebrated as artifacts of an alien, infinitely more advanced civilization.
  - p_l 4y ago
    At least with chocolate, during communist times in Poland AFAIK if someone was packaged as "chocolate" it had to be chocolate - it was "chocolate-like product" that you had to be wary of which was closer to american "chocolate"[1] [1] I jest, I jest, but what is legal to be in store-bought chocolate in USA, based on things I actually ended up getting while visiting, was literally one of the ways communist poland cut chocolate to make "chocolate-like product" :V
    - michaelcampbell 4y ago
      You footnote something... that immediately follows the footnote. I'll never understand this footnote cult in HN, I guess.
- nradov 4y ago
  That's true for some categories of goods but not all. They have way more than 10 kinds of wine.
- namdnay 4y ago
  I guess the european equivalent would be LIDL
  - p_l 4y ago
    Lidl, at least in most places, doesn't run bulk stores like Costco apparently is. There are some bulk stores with memberships, some of them limited to B2B sales, some accepting normal people as customers - places like MAKRO and Selgross - but they obviously are mainly a warehouse supplier for shops and companies. I don't know how Lidl is in terms of selection in other countries, but especially with smaller stores the joke is that "every week something new" which refers more to somewhat random selection, and they tend to have lesser known brands (which, while not necessarily a bad thing, isn't also a sign of quality, and sometimes you really like the specific brand). Personally when I shopped more at Lidl (had one opposite of office), I compared the selection to "what recently fell of the truck and will stay till it's all sold"
    - DocTomoe 4y ago
      It is always interesting to read how different such brands are perceived in different countries. Over here in Germany, Lidl is considered "the better discount store" as compared to Aldi (especially Aldi Nord), and has made a push to more high-level products (which often are better than name-brand stuff that they also carry). When I talk to British friends, the idea of shopping at a Lidl seems to be sacrilegious to them. Still, when I went into one somewhere in Yorkshire before the plague, it was pretty much what I expected.
      - lowercased 4y ago
        We got a Lidl near us - one of the first when they were planning their US East Coast invasion. Apparently, they're scaling back new stores, and ours is one of a handful of 'large' footprint stores, and almost everything after that is (or will be) probably half the size. We love Lidl mostly because of the price. Almost everything was/is around 20-30% less than the stores around it. Much of this is from 'store brand' items, but the price diff is lower even against other 'store brand' pricing. When they opened, they had a wider variety of items, including a wide variety of daily baked breads. That got scaled back a lot, as apparently there's not enough support/demand in this area for fresh breads outside of 'white'. There's a weird circle of grocery stores that have sprung up in my area. Within a 3 mile radius, there's Target, Walmart, Lidl, Aldi, Wegmans, Food Lion, Harris Teeter, Publix and Lowe's (2?). It seems excessive to me, but the area is growing, and they likely wouldn't have invested in this area without a strong expectation of not losing money. There's still a Lidl stigma around here. Many folks I talk to think of it as some 'poor person' shop.
- f1refly 4y ago
  > soviet stores. There is no 10 kinds of everything, but the ones available are guaranteed to be fairly good quality According to people from the former soviet block I know, the reason they got so good at fixing stuff is because the first thing they did after buying an appliance from a store (after it became available eventually) was fixing it because nothing ever worked as expected. I guess "nothing" is an overstatement but I still wouldn't use the soviet union as an example for great product quality.
  - rtpg 4y ago
    I feel like that was generally a property of everything everywhere though. I still remember sticking a fork into my VCR (probably made in USA?) or basically every car having something wrong with it. Things have gotten more reliable across the board imo.
findjashua 4y ago
2 words: quality control
geodel 4y ago
You are right that at the end of day it is just a store. I know many people who keep renewing Costco membership every year but goes like once or twice a year. I on the other end is in same category that author describes. Even for gallon of milk I'd prefer going Costco and if there is more than one item it is not even a question. To me most basic thing would be great quality at that price level that I guess everyone else is also looking for. At deeper level by reducing choice it sets a familiar pattern of food I eat on daily/weekly/monthly basis. Or for clothes just like people wear brands and proud to announce it. For me it is I do not wear brands and similarly proud of the fact.
14 4y ago
It you eat the food they offer you can definitely get it at a better price. Furthermore Costco demands a higher quality for certain products. I don’t have the source on that but read somewhere once that say the can of soup you get at a regular grocery store then compare it to Costco they have better ingredients things like higher protein for example. I also know things like protein powder were the same price but much larger at Costco. Meat is much better quality and cheaper. Their return policy is hassle free. Probably a lot more I could say about Costco.
grapeskin 4y ago
I was a member for 2 years, although outside of the US. The store is mostly US/UK/Australian imports of questionable quality, prices far higher than local goods (which is to be expected when shipped long distance for one specific chain), and questionable desirability (e.g. sauces not used much in local cuisine, of far lower quality than local brands, in containers far larger while also more expensive per gram). Products Americans would want from home are also almost non-existent. So it caters to nobody. I think it had a lot of novelty at first since it's a very "American" thing and kind of a fun trip, but I'm not sure of the longterm viability. There's only so much you can do with a store that sells oversized budget-brand ketchup at luxury prices and stale jars of nuts. Never visited while I was living in the US, but I doubt it could beat Winco. Bulk, low prices, often local, and no BS membership fees.
- lotsofpulp 4y ago
  Winco is great, but it is not competing with Costco, which has a reputation for selling curated products with somewhat higher quality. Winco is solid though, and living near both is extremely convenient.
slyall 4y ago
New Zealand is getting our first store in a couple of months and people are obsessed with it. Stories in the media nearly every week. Long queues for membership. A lot of this is because the local Supermarket Duopoly avoids competing on price and makes great profits. People are looking forward to cutting their costs and also a flow-on as the supermarkets cut their prices a little to compete. Similar to IKEA which is a year or so away. Easy to take for granted when you have it but the alternative is paying a lot more for similar to worse quality.
- divbzero 4y ago
  It would be fascinating to be part of that team at Costco or IKEA planning to open a new store in a new country. On top of the challenges you can think of, there must be aspects of running the business that you take for granted in your home country and don’t realize will be a challenge in the new country.
  - barry-cotter 4y ago
    > On top of the challenges you can think of, there must be aspects of running the business that you take for granted in your home country and don’t realize will be a challenge in the new country. New Zealand has an educated, English speaking workforce, uses the English common law and actually has rule of law. They know how to do this. IKEA has stores in Vietnam, where all of those are much less true. They’re not going to learn much about international expansion they don’t know already. This is very different from a Canadian company opening up in the US, or a French one in Belgium. IKEA, and I presume Costco know how to do this already.
  - pionar 4y ago
    You hire people from the new market who do know those quirks. Or, you can be like McDonald's and most fast food/QSR companies, and simply license your name to "master franchisees" in those markets.
  - DocTomoe 4y ago
    If you want to read an example of people failing at that task, read up on Walmart trying to conquer Germany. [1] [1] many, many articles, but https://www.theguardian.com/business/2006/jul/28/retail.money https://www.theguardian.com/business/2006/jul/28/retail.mone... is as good as any
freeqaz 4y ago
The simplest answer to this is Kirkland Signature. It's a very genius idea that Amazon is starting to copy now with AmazonBasics, but Costco has been doing it for years. This article explains it better than I can: https://every.to/napkin-math/how-costco-convinces-brands-to-cannibalize-722932 https://every.to/napkin-math/how-costco-convinces-brands-to-... TL;DR: If you buy something like Grey Goose vodka, it's going to be the same product as the Kirkland Signature version on the shelf next to it. It is often literally from the same factory. Costco AND Grey Goose make more money by being able to sell to multiple market segments. Read that article. It's genius and one of the many reasons I love shop at Costco.
- JumpCrisscross 4y ago
  The source for this article’s core claim is a pair of Reddit comments, FYI.
- pirate787 4y ago
  Store brands (private label brands owned by the retailer) have been around forever and are not a Costco innovation. Every US grocery store and most big box stores sell them.
shp0ngle 4y ago
The piece is not really about costco though. I mean it is, but not really.
- bloppe 4y ago
  ya lol it feels like 90% of the people on HN go straight to the comments without reading the pieces
sammalloy 4y ago
> I would like to understand why people are so enamored with Costco I’ve been going to Costco since it was Price Club in the 1980s. I can explain why people love it. There’s an aura of mystery to the shopping experience because of the philosophy behind the layout. They basically want you to shop around the whole store because nothing is ever in the same place and product longevity beyond basic consumer staples is unheard of. In other words, it is unlikely the special product you find one week will be there the next. This kind of unpredictability goes against the grain of the reliability built into the shopping experience, and it’s what I find so attractive about it. Not only will you be exposed to something new and different, but you’ll have to settle for an entirely different product than the one you planned on buying because of the surprise factor at work. Obviously, this consumer approach won’t work for everyone, especially those who stubbornly buy the same thing every week or month.
- throwaway0a5e 4y ago
  Sounds like Ocean State Job Lot or Mardens but with a membership fee to keep the wrong crowd out.
  - sammalloy 4y ago
    The more interesting thing is how they weed out their vendors, not their members. Edit: you’re right, it sounds like they stole some of their ideas from Marden’s.
- firebird84 4y ago
  When I worked a summer at BJ's (a similar wholesale club) the manager informed me that this was by design. I was asking why we needed to move all the stuff, if we were discontinuing or something. He said nope, we just have to do this every now and then because it keeps people shopping longer. There may be an added "experience" element to it as well, but this was an eye opener to me as a teen.
gopalv 4y ago
> I would like to understand why people are so enamored with Costco The first thing someone told me when I got to the US was to go to Costco, pay the membership and get an AMEX charge card for Costco. If you are someone with zero credit history and want to buy groceries without having cash on you all the time, then Costco is a big part of the "welcome to America" package. What Costco lacks in variety, it made up in quality and quantity (no, that's not a choice). The food is good, most things are sold at cost, gas is cheaper, diapers are cheaper ... everything with a Kirkland label is middle-of-the-curve good. So Costco runs become a regular thing. Before you know it, it is like church - go there, show your membership and eat the wafers. Not quite a religion, but something you still proselytize.
- base698 4y ago
  Costco only takes Visa.
  - chiyc 4y ago
    I want to say that's a relatively recent change.
    - ridgered4 4y ago
      Yes, sometime within the last 5 years they broke their long partnership with AMEX. It seems to be Citibank now.
      - ianai 4y ago
        Have to wonder whether it’ll change in another 5 years. Making 4% back on gas is mega killer though.
        AdmiralAsshat 4y ago
        My understanding is that they changed because Citi offered them a better deal.[0] That said, I do kinda miss the Amex and its automatic extended warranty. [0]https://money.cnn.com/2016/03/31/pf/costco-visa-american-express/index.html https://money.cnn.com/2016/03/31/pf/costco-visa-american-exp...
bigtones 4y ago
Australians have had Costco for 2 years and they absolutely love it. Very popular.
Suzuran 4y ago
Costco is generally clean, Costco doesn't have the corporate reputation for extreme exploitation of their workers that Walmart does, Costco's store brand is actually decent, there appears to be no overt cost-cutting in store operations, and for me the big deal was that Costco was the only place around here that attempted to actually enforce mask mandates after you were inside the store. I saw one lady getting escorted out for taking her mask off and starting a fight when asked to put it back on; She screamed "I'LL NEVER SHOP HERE AGAIN!" and the employee escorting her out said matter-of-factly "Yes, that's what trespass means." In short, they give the appearance of doing ask if the things a business should be doing in line with the intent of the law, as opposed to just doing the bare minimum to the letter of the law, and doing what you are supposed to do is so rare as to be considered exceptional.
- dmos62 4y ago
  > Costco is generally clean That makes it sound like cleanliness is not the norm in grocery stores in US.
  - Spivak 4y ago
    That depends, are you the health inspector? But yeah, unless you live in an area where the average home is 400k+ and the average car is a Mercedes your local grocery stores will be "grimey". Not really dirty, but staffed by people who (rightfully) aren't paid enough to care. By comparison Costco is basically sterile.
  - convFixb 4y ago
    Thanks to our old friend Baumol [1], cleanliness is not the norm in any typical grocery store in the 1st world. [1] https://en.wikipedia.org/wiki/Baumol's_cost_disease https://en.wikipedia.org/wiki/Baumol's_cost_disease
    - dmos62 4y ago
      You're saying that people who work in grocery stores don't care about their job performance, because their level of pay is guaranteed by workers in other industries being productive? That's a cynical thought. By the way, where I'm from (EU), cleanliness is definitely the norm for grocery stores.
eddieroger 4y ago
Plenty of good points made already - gas is cheap, products are good - but what keeps me a Costco shopper is the consistent and frequent stories about them being a genuinely good employer. Maybe because I've spent my career in retail IT, but I hear all the time about how good of a place Costco is to work. Staff turnover is low, wages are good, and they close for most holidays. I may not need 48 AA batteries often, but when I do, I'd rather buy them at Costco.
- lbrito 4y ago
  I was totally unaware of that. Thank you for pointing it out. I assumed Costco had shitty employee treatment like other large chains. Its sad that this has become the default we have come to expect from stores and not even think about it.
michaelcampbell 4y ago
Trader Joe's customers enter the chat... I see a few stores have their evangelists, but TJ's are the most evangelical IME. Other places that seem to have their cults are Menard's and Buc-ees. I've never been to a Menards, living in the southern US, but I get the love for all the others.

by lbrito 4y ago

kvark 4y ago

For me, it’s a modern equivalent of the soviet stores. There is no 10 kinds of everything, but the ones available are guaranteed to be fairly good quality and at an affordable price. Speaking more modern, it saves the mental effort of researching choices. Need something? Check Costco, buy if there, done. Of course there are negatives associated with them, too.

el-salvador 4y ago
PriceSmart, (Costco's Latin American cousin), does something similar too. They research/test the products before selling them so that they comply with their quality standards. So once products are on the shelves its likely that they are good. This make buying decisions easier. Which is a much better shopping experience than having to read a dozen product reviews while shopping online.
inferiorhuman 4y ago
> the ones available are guaranteed to be fairly good quality and at an affordable price I bought into the hype and got a Costco membership a few years back. One of the first things I went looking for was whole bean coffee (Peet's xmas roast). The local Costco had a bunch of coffee from Starbucks and Peets (meh quality to start) but only the painfully dark roasts and all of it was ground. Pre-ground coffee in bulk has a pretty limited use case (and relatively short shelf life). Fast forward to last week and I went looking for a new fridge at Costco dot com. They prominently featured LG (ugh) and Samsung refrigerators. While some LG models seem to review pretty well I've never seen anyone say anything positive about Samsung, their service, or the serviceability of their appliances. I'm in the middle of dealing with a defective LG fridge and that's about the nicest thing I can say about LG's warranty and customer support. Costco may have a permissive return policy and decent customer support but I would never blindly buy something without doing a bit of research just because it's at Costco. Especially with a big ticket item like a fridge I'd rather use my Amex anyhow.
- iudqnolq 4y ago
  My experience is the big ticket items are all fine products at normal prices, but there's no reason to pick Costco for them. I suspect it's where they make a lot of their profit, considering their groceries are famously low margin. I buy groceries and gas exclusively there.
  - shaftway 4y ago
    I strongly suspect it's the extra services that third parties sell through them. Like the vacation packages, air conditioning installation, etc. We almost got a Puronics filter through them, but stopped short when we found out that it was $9000 at Costco, but $6000 through an independent installer.
    - lotsofpulp 4y ago
      Costco’s profit is all membership fees. Everything else is (in aggregate) sold at cost. This is public information in their 10-K filings. For the hotel and travel stuff, they get a commission like other travel agents/channels.
  - gambiting 4y ago
    Here in UK the #1 reason to get them from Costco is that they give 5 years warranty on all electronics and home appliances, way beyond what the manufacturer offers. I'd happily buy a new TV or a fridge from them for that reason alone.
  - lotsofpulp 4y ago
    The reason to pick Costco for appliances is because you get a 4 year warranty if you use Costco credit card (in the US).
  - mikebonnell 4y ago
    Almost all of their profit is from membership fees. https://investor.costco.com/node/24021/html https://investor.costco.com/node/24021/html Sales almost equal merchandise cost plus selling expenses. Membership fees add $984 million on top of that.
rexf 4y ago
Yeah, Costco has OK selection and OK/good prices. The downside for groceries is the bulk sizing can be much more than you want to buy. Their return policy is also very good. Obviously do not abuse this (or you are being a jerk). This means you can buy things without hesitation since you can easily return it should you run into an issue later.
mantas 4y ago
> soviet stores > but the ones available are guaranteed to be fairly good quality Yeah, right... Nope.
badpun 4y ago
> soviet stores. (...) but the ones available are guaranteed to be fairly good quality and at an affordable price Must be different soviets that I lived in. The quality was often terrible (e.g. "chocolate" that did not contain cocoa at all, ugly clothes and shoes that would break down quickly, beer that tasted like piss etc.) and that is assuming the goods were in the store at all. Basic western goods, such as Levi jeans or can of Coca-Cola were celebrated as artifacts of an alien, infinitely more advanced civilization.
- p_l 4y ago
  At least with chocolate, during communist times in Poland AFAIK if someone was packaged as "chocolate" it had to be chocolate - it was "chocolate-like product" that you had to be wary of which was closer to american "chocolate"[1] [1] I jest, I jest, but what is legal to be in store-bought chocolate in USA, based on things I actually ended up getting while visiting, was literally one of the ways communist poland cut chocolate to make "chocolate-like product" :V
  - michaelcampbell 4y ago
    You footnote something... that immediately follows the footnote. I'll never understand this footnote cult in HN, I guess.
nradov 4y ago
That's true for some categories of goods but not all. They have way more than 10 kinds of wine.
namdnay 4y ago
I guess the european equivalent would be LIDL
- p_l 4y ago
  Lidl, at least in most places, doesn't run bulk stores like Costco apparently is. There are some bulk stores with memberships, some of them limited to B2B sales, some accepting normal people as customers - places like MAKRO and Selgross - but they obviously are mainly a warehouse supplier for shops and companies. I don't know how Lidl is in terms of selection in other countries, but especially with smaller stores the joke is that "every week something new" which refers more to somewhat random selection, and they tend to have lesser known brands (which, while not necessarily a bad thing, isn't also a sign of quality, and sometimes you really like the specific brand). Personally when I shopped more at Lidl (had one opposite of office), I compared the selection to "what recently fell of the truck and will stay till it's all sold"
  - DocTomoe 4y ago
    It is always interesting to read how different such brands are perceived in different countries. Over here in Germany, Lidl is considered "the better discount store" as compared to Aldi (especially Aldi Nord), and has made a push to more high-level products (which often are better than name-brand stuff that they also carry). When I talk to British friends, the idea of shopping at a Lidl seems to be sacrilegious to them. Still, when I went into one somewhere in Yorkshire before the plague, it was pretty much what I expected.
    - lowercased 4y ago
      We got a Lidl near us - one of the first when they were planning their US East Coast invasion. Apparently, they're scaling back new stores, and ours is one of a handful of 'large' footprint stores, and almost everything after that is (or will be) probably half the size. We love Lidl mostly because of the price. Almost everything was/is around 20-30% less than the stores around it. Much of this is from 'store brand' items, but the price diff is lower even against other 'store brand' pricing. When they opened, they had a wider variety of items, including a wide variety of daily baked breads. That got scaled back a lot, as apparently there's not enough support/demand in this area for fresh breads outside of 'white'. There's a weird circle of grocery stores that have sprung up in my area. Within a 3 mile radius, there's Target, Walmart, Lidl, Aldi, Wegmans, Food Lion, Harris Teeter, Publix and Lowe's (2?). It seems excessive to me, but the area is growing, and they likely wouldn't have invested in this area without a strong expectation of not losing money. There's still a Lidl stigma around here. Many folks I talk to think of it as some 'poor person' shop.
f1refly 4y ago
> soviet stores. There is no 10 kinds of everything, but the ones available are guaranteed to be fairly good quality According to people from the former soviet block I know, the reason they got so good at fixing stuff is because the first thing they did after buying an appliance from a store (after it became available eventually) was fixing it because nothing ever worked as expected. I guess "nothing" is an overstatement but I still wouldn't use the soviet union as an example for great product quality.
- rtpg 4y ago
  I feel like that was generally a property of everything everywhere though. I still remember sticking a fork into my VCR (probably made in USA?) or basically every car having something wrong with it. Things have gotten more reliable across the board imo.

findjashua 4y ago

2 words: quality control

geodel 4y ago

You are right that at the end of day it is just a store. I know many people who keep renewing Costco membership every year but goes like once or twice a year. I on the other end is in same category that author describes. Even for gallon of milk I'd prefer going Costco and if there is more than one item it is not even a question. To me most basic thing would be great quality at that price level that I guess everyone else is also looking for. At deeper level by reducing choice it sets a familiar pattern of food I eat on daily/weekly/monthly basis. Or for clothes just like people wear brands and proud to announce it. For me it is I do not wear brands and similarly proud of the fact.

14 4y ago

It you eat the food they offer you can definitely get it at a better price. Furthermore Costco demands a higher quality for certain products. I don’t have the source on that but read somewhere once that say the can of soup you get at a regular grocery store then compare it to Costco they have better ingredients things like higher protein for example. I also know things like protein powder were the same price but much larger at Costco. Meat is much better quality and cheaper. Their return policy is hassle free. Probably a lot more I could say about Costco.

grapeskin 4y ago

I was a member for 2 years, although outside of the US. The store is mostly US/UK/Australian imports of questionable quality, prices far higher than local goods (which is to be expected when shipped long distance for one specific chain), and questionable desirability (e.g. sauces not used much in local cuisine, of far lower quality than local brands, in containers far larger while also more expensive per gram). Products Americans would want from home are also almost non-existent. So it caters to nobody. I think it had a lot of novelty at first since it's a very "American" thing and kind of a fun trip, but I'm not sure of the longterm viability. There's only so much you can do with a store that sells oversized budget-brand ketchup at luxury prices and stale jars of nuts. Never visited while I was living in the US, but I doubt it could beat Winco. Bulk, low prices, often local, and no BS membership fees.

lotsofpulp 4y ago
Winco is great, but it is not competing with Costco, which has a reputation for selling curated products with somewhat higher quality. Winco is solid though, and living near both is extremely convenient.

slyall 4y ago

New Zealand is getting our first store in a couple of months and people are obsessed with it. Stories in the media nearly every week. Long queues for membership. A lot of this is because the local Supermarket Duopoly avoids competing on price and makes great profits. People are looking forward to cutting their costs and also a flow-on as the supermarkets cut their prices a little to compete. Similar to IKEA which is a year or so away. Easy to take for granted when you have it but the alternative is paying a lot more for similar to worse quality.

divbzero 4y ago
It would be fascinating to be part of that team at Costco or IKEA planning to open a new store in a new country. On top of the challenges you can think of, there must be aspects of running the business that you take for granted in your home country and don’t realize will be a challenge in the new country.
- barry-cotter 4y ago
  > On top of the challenges you can think of, there must be aspects of running the business that you take for granted in your home country and don’t realize will be a challenge in the new country. New Zealand has an educated, English speaking workforce, uses the English common law and actually has rule of law. They know how to do this. IKEA has stores in Vietnam, where all of those are much less true. They’re not going to learn much about international expansion they don’t know already. This is very different from a Canadian company opening up in the US, or a French one in Belgium. IKEA, and I presume Costco know how to do this already.
- pionar 4y ago
  You hire people from the new market who do know those quirks. Or, you can be like McDonald's and most fast food/QSR companies, and simply license your name to "master franchisees" in those markets.
- DocTomoe 4y ago
  If you want to read an example of people failing at that task, read up on Walmart trying to conquer Germany. [1] [1] many, many articles, but https://www.theguardian.com/business/2006/jul/28/retail.money https://www.theguardian.com/business/2006/jul/28/retail.mone... is as good as any

freeqaz 4y ago

The simplest answer to this is Kirkland Signature. It's a very genius idea that Amazon is starting to copy now with AmazonBasics, but Costco has been doing it for years. This article explains it better than I can: https://every.to/napkin-math/how-costco-convinces-brands-to-cannibalize-722932 https://every.to/napkin-math/how-costco-convinces-brands-to-... TL;DR: If you buy something like Grey Goose vodka, it's going to be the same product as the Kirkland Signature version on the shelf next to it. It is often literally from the same factory. Costco AND Grey Goose make more money by being able to sell to multiple market segments. Read that article. It's genius and one of the many reasons I love shop at Costco.

JumpCrisscross 4y ago
The source for this article’s core claim is a pair of Reddit comments, FYI.
pirate787 4y ago
Store brands (private label brands owned by the retailer) have been around forever and are not a Costco innovation. Every US grocery store and most big box stores sell them.

shp0ngle 4y ago

The piece is not really about costco though. I mean it is, but not really.

bloppe 4y ago
ya lol it feels like 90% of the people on HN go straight to the comments without reading the pieces

sammalloy 4y ago

> I would like to understand why people are so enamored with Costco I’ve been going to Costco since it was Price Club in the 1980s. I can explain why people love it. There’s an aura of mystery to the shopping experience because of the philosophy behind the layout. They basically want you to shop around the whole store because nothing is ever in the same place and product longevity beyond basic consumer staples is unheard of. In other words, it is unlikely the special product you find one week will be there the next. This kind of unpredictability goes against the grain of the reliability built into the shopping experience, and it’s what I find so attractive about it. Not only will you be exposed to something new and different, but you’ll have to settle for an entirely different product than the one you planned on buying because of the surprise factor at work. Obviously, this consumer approach won’t work for everyone, especially those who stubbornly buy the same thing every week or month.

throwaway0a5e 4y ago
Sounds like Ocean State Job Lot or Mardens but with a membership fee to keep the wrong crowd out.
- sammalloy 4y ago
  The more interesting thing is how they weed out their vendors, not their members. Edit: you’re right, it sounds like they stole some of their ideas from Marden’s.
firebird84 4y ago
When I worked a summer at BJ's (a similar wholesale club) the manager informed me that this was by design. I was asking why we needed to move all the stuff, if we were discontinuing or something. He said nope, we just have to do this every now and then because it keeps people shopping longer. There may be an added "experience" element to it as well, but this was an eye opener to me as a teen.

gopalv 4y ago

> I would like to understand why people are so enamored with Costco The first thing someone told me when I got to the US was to go to Costco, pay the membership and get an AMEX charge card for Costco. If you are someone with zero credit history and want to buy groceries without having cash on you all the time, then Costco is a big part of the "welcome to America" package. What Costco lacks in variety, it made up in quality and quantity (no, that's not a choice). The food is good, most things are sold at cost, gas is cheaper, diapers are cheaper ... everything with a Kirkland label is middle-of-the-curve good. So Costco runs become a regular thing. Before you know it, it is like church - go there, show your membership and eat the wafers. Not quite a religion, but something you still proselytize.

base698 4y ago
Costco only takes Visa.
- chiyc 4y ago
  I want to say that's a relatively recent change.
  - ridgered4 4y ago
    Yes, sometime within the last 5 years they broke their long partnership with AMEX. It seems to be Citibank now.
    - ianai 4y ago
      Have to wonder whether it’ll change in another 5 years. Making 4% back on gas is mega killer though.
      - AdmiralAsshat 4y ago
        My understanding is that they changed because Citi offered them a better deal.[0] That said, I do kinda miss the Amex and its automatic extended warranty. [0]https://money.cnn.com/2016/03/31/pf/costco-visa-american-express/index.html https://money.cnn.com/2016/03/31/pf/costco-visa-american-exp...

bigtones 4y ago

Australians have had Costco for 2 years and they absolutely love it. Very popular.

Suzuran 4y ago

Costco is generally clean, Costco doesn't have the corporate reputation for extreme exploitation of their workers that Walmart does, Costco's store brand is actually decent, there appears to be no overt cost-cutting in store operations, and for me the big deal was that Costco was the only place around here that attempted to actually enforce mask mandates after you were inside the store. I saw one lady getting escorted out for taking her mask off and starting a fight when asked to put it back on; She screamed "I'LL NEVER SHOP HERE AGAIN!" and the employee escorting her out said matter-of-factly "Yes, that's what trespass means." In short, they give the appearance of doing ask if the things a business should be doing in line with the intent of the law, as opposed to just doing the bare minimum to the letter of the law, and doing what you are supposed to do is so rare as to be considered exceptional.

dmos62 4y ago
> Costco is generally clean That makes it sound like cleanliness is not the norm in grocery stores in US.
- Spivak 4y ago
  That depends, are you the health inspector? But yeah, unless you live in an area where the average home is 400k+ and the average car is a Mercedes your local grocery stores will be "grimey". Not really dirty, but staffed by people who (rightfully) aren't paid enough to care. By comparison Costco is basically sterile.
- convFixb 4y ago
  Thanks to our old friend Baumol [1], cleanliness is not the norm in any typical grocery store in the 1st world. [1] https://en.wikipedia.org/wiki/Baumol's_cost_disease https://en.wikipedia.org/wiki/Baumol's_cost_disease
  - dmos62 4y ago
    You're saying that people who work in grocery stores don't care about their job performance, because their level of pay is guaranteed by workers in other industries being productive? That's a cynical thought. By the way, where I'm from (EU), cleanliness is definitely the norm for grocery stores.

eddieroger 4y ago

Plenty of good points made already - gas is cheap, products are good - but what keeps me a Costco shopper is the consistent and frequent stories about them being a genuinely good employer. Maybe because I've spent my career in retail IT, but I hear all the time about how good of a place Costco is to work. Staff turnover is low, wages are good, and they close for most holidays. I may not need 48 AA batteries often, but when I do, I'd rather buy them at Costco.

lbrito 4y ago
I was totally unaware of that. Thank you for pointing it out. I assumed Costco had shitty employee treatment like other large chains. Its sad that this has become the default we have come to expect from stores and not even think about it.

michaelcampbell 4y ago

Trader Joe's customers enter the chat... I see a few stores have their evangelists, but TJ's are the most evangelical IME. Other places that seem to have their cults are Menard's and Buc-ees. I've never been to a Menards, living in the southern US, but I get the love for all the others.