Costco Essay

1284 Words May 18th, 2012 6 Pages
“Costco is a warehouse that offers members a limited selection of nationally branded and selected private-label products in a wide range of merchandise categories. We concentrate on our mission to continually bring quality goods and services to our members at the lowest possible prices, while being responsible corporate citizens, taking care of our members and our employees, and respect in our vendors.” (Annual Report 2010)”

Costco is the way to go when it comes to online and in-store shopping. The retail chain store ranked No. 1 in a recent Consumer Reports survey of 10 stores — besting JCPenney, Kmart, Kohl’s, Macy’s, Meijer, Sam’s Club, Sears, Target and Wal-Mart for its overall shopping experience, according to
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Sixth, gains in the stock market and job market equal more consumer spending, however, consumers are still cost conscience due to the recession and finding the best deals brings them to these stores. Seventh, people respond highly to promotions and coupons, however, other stores have limited these items, which warehouse stores have not due to membership newsletters. Finally, price inflation was increased the last few years and warehouse clubs still have lower price inflation increases compared to grocery stores or other retail stores, subsequently, these warehouse clubs can still have lower prices than the small business competitors.

Even though these trends are positive for the warehouse industry, there still are some challenges they have to face. Firstly, economically the recession has brought less buyers into the store, thus, preventing the growth. Secondly, competition has been quite the challenge. This is a highly competitive industry because of “price, merchandise quality and selection, warehouse location and membership service”. However, these challenges exist due to the hours of operation being shorter than most retailers, dependence upon vendors for supplies that can lead to lack of stock, and price competitiveness leads to a limited choice of products for consumers compared to one-stop shops. Thirdly, there are legal obstacles that these warehouses encompass, such as, stock on high shelves and self

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