Price ClubCostco's history began with Sol Price and his son, Robert, opening the first Price Club warehouse on July 12, 1976, on Morena Boulevard in San Diego, California. This gave birth to a new concept: a retail warehouse club. The Price family placed Price Club Warehouse inside a series of old airplane hangars previously owned by Howard Hughes; that warehouse, now known as Costco Warehouse #401, is still in operation today.
Costco opensJames Sinegal, James (Jim) Sinegal and Jeffrey Brotman, Jeffrey H. Brotman opened the first Costco warehouse in Seattle on September 15, 1983. Sinegal had started in wholesale distribution by working for Sol Price at FedMart; Brotman, an Attorney at law (United States), attorney from an old Seattle retailing family, had also been involved in retail distribution from an early age. He began his retail involvement as a bagger, grocery bagger. A second store opened in Portland, Oregon, Portland in October, and a third in Spokane, Washington, Spokane in
The "PriceCostco" mergerIn 1993, Costco and Price Club agreed to merge operations themselves after Price declined an offer from Walmart to merge Price Club with their warehouse store chain, Sam's Club. Costco's business model and size were similar to those of Price Club, which made the merger more natural for both companies. The combined company took the name PriceCostco, and memberships became universal, meaning that a Price Club member could use their membership to shop at Costco and vice versa. PriceCostco boasted 206 locations generating $16billion in annual sales. PriceCostco was initially led by executives from both companies, but in 1994, the Price brothers left the company to form PriceSmart, a warehouse club chain in Central America and the Caribbean unrelated to the current Costco. In 1997, Costco changed its name to Costco Wholesale Corporation, and all remaining Price Club locations were rebranded
Other company milestonesOn April 26, 2012, CNBC premiered its documentary, ''The Costco Craze: Inside the Warehouse Giant''. In 2014, Costco was the third largest retailer in the United States. That year Costco announced plans to open an online store in China using Alibaba Group. Costco announced the opening of 29 new locations in 2016, the most in one year since 2007. Span Construction, led by King Husein, has constructed almost all of Costco's buildings since 1989."King Husein: On the back of a simple concept, Husein has built a business that has transformed an industry"
Costco todayIn the United States, Costco's main competitors operating membership warehouses are Sam's Club and BJ's Wholesale Club. Costco employs 254,000 full and part-time employment, employees worldwide. In 2016, Costco had 86.7million members. This increased to 90.3million members in 2017. and 94.3million in 2018. In 2019, Costco had 98.5million members. In 2020, Costco had 105.5million members. Costco was the first company to grow from zero to $3billion in sales in under six years. For the fiscal year ending on August 31, 2012, the company's sales totaled $97.062billion, with $1.709billion net profit. , Costco is ranked on the Fortune 500 rankings of the largest United States corporations by total revenue. The ACSI (The American Customer Satisfaction Index) named Costco number one in the specialty retail store industry with a score of 84 in 2014. From December 2013, Costco's board of directors was chaired by co-founder Jeffrey H. Brotman and included James Sinegal, co-founder and director, and two officers of the company: president/CEO W. Craig Jelinek and CFO Richard A. Galanti. On August 1, 2017, Jeffrey Brotman died. , James Sinegal and W. Craig Jelinek remained on the board. Jim Sinegal stepped down in 2018.
Locations, Costco had 804 warehouses worldwide: *558 in the United States *103 in Canada *39 in Mexico *29 in the United Kingdom *27 in Japan *16 in South Korea *14 in Taiwan *13 in Australia *3 in Spain *1 in Iceland *2 in France *2 in mainland China *1 in New Zealand (opening in 2022) *1 in Sweden (opening in 2022) New Costco locations are opened regularly. In 2022, the company plans to open warehouses for the first time in New Zealand and Sweden.
International locationsWarehouses outside the U.S. are similar to the company's domestic locations, featuring generally identical layout, signage, and even parking lot markings. Food court menus are tailored to international tastes, with Australian and New Zealand meat pie, meat pies on offer in Australia; poutine in Canada; seafood-topped pizza in Asian locations; Tacos al pastor, pastor taco-topped pizzas in Mexico; clam chowder in Japan, South Korea, and Taiwan; plokkfiskur in Iceland; and jacket potatoes in the UK. Additionally, Costco has led a strategic initiative to enhance the merchandise mix available at international warehouses by tailoring products to local tastes, offering a selection of both American and local products. In Canada, it is a participant in the voluntary Scanner Price Accuracy Code managed by the Retail Council of Canada.
Largest locationsIn 2005, the world's largest Costco by square feet was located in Hillsboro, Oregon. In 2015, Costco completed an expansion in Salt Lake City, making it the new largest Costco at . In 2019, Costco opened its biggest store in Canada, in St. John's, Newfoundland and Labrador, St. John's; the store is . In 2011, Costco's highest volume store was in Seoul, South Korea. In 2018, Taiwan's Taichung ranked at the top in the number of members and was second in the world in sales volume, behind South Korea's Yangjae store in Seoul. Of the 13 Costco operations in Taiwan, three – Taichung, Neihu, and Chungho – ranked in the top 10 in the world in sales volume.
Costco Business CentersCostco Business Centers are warehouses similar to regular Costco warehouses, and are open to all Costco members, regardless of membership type. Their merchandise caters predominantly to business, enterprises, with a focus on small businesses. Business Centers do not carry most consumer items like clothing, jewelry, media, and tires, while carrying larger quantities and more options for the business products they do carry. More than 70% of the items that can be acquired from a Costco Business Center cannot be found in a typical Costco store. Some locations do have a food court, a gas station, or both. Unlike regular warehouses, most Costco Business Centers have a Print & Copy Center which provides Printing shop, printing professional services. They have large parking spaces for trucks and are capable of Home delivery, delivering goods to businesses in bulk quantities, with a delivery charge of $25 for orders that are below $250. Costco Business Center operating hours are shorter than regular warehouses (usually opening at 7:00 am on Mondays to Saturdays and closed on Sundays), while discounts and coupons for Business Centers are issued separately from regular warehouses.
Locations, there are 20 Costco Business Centers in the United States, located in Orlando, Florida; Dallas, Texas; Minneapolis, Minnesota; Phoenix, Arizona; California (Commerce, California, Commerce, Hawthorne, California, Hawthorne, Hayward, California, Hayward, North Hollywood, Los Angeles, North Hollywood, Sacramento, California, Sacramento, San Diego, South San Francisco, California, South San Francisco, Ontario, California, Ontario and Westminster, California, Westminster); Denver, Denver, Colorado; Morrow, Georgia; Bedford Park, Illinois; Hackensack, New Jersey; Las Vegas, Las Vegas, Nevada; and Washington (Lynnwood, Washington, Lynnwood, and Fife, Washington, Fife). The first Costco Business Center outside the U.S. opened in Canada in Scarborough, Toronto in spring 2017. In September 2020, the second Canadian Costco Business Centre opened in St. Hubert, Québec, near Montréal.
FinancesFor the fiscal year 2019, Costco reported earnings of US$3.659billion, with an annual revenue of US$152.703billion, an increase of 7.9% over the previous fiscal cycle. Costco's shares traded at over $205 per share, and its market capitalization was valued at over US$95.7billion in October 2018.
Business modelCostco is a membership only warehouse which generates a majority of its revenue from retail sales and a small percentage from membership fees. Customers must buy memberships to access the warehouse and make purchases. This is executed through the direct sourcing and efficient inventory management techniques. Costco divides its business into three segments: United States Operations, Canadian Operations, and Other International Operations. These 3 business segments are reported by revenue and operating income. Of the three, the United States Operations was the largest, followed by Canadian Operations.
Sales modelThe company's rule is that no regular item may be Markup (business), marked up more than 14% over cost, and no Kirkland Signature item may be marked up more than 15% over cost. The company runs very lean, with Overhead Costs, overhead costs at about 10% of revenue and profit margins at 2%. Costco's annual membership fees (US$60/year for Gold Star, US$120/year for Executive ) account for 80% of Costco's gross margin and 70% of its operating income. If Costco feels the wholesale price of any individual product is too high, they will refuse to stock the product. For example, in November 2009, Costco announced that it would stop selling Coca-Cola products, because the soft-drink maker refused to lower its wholesale prices. Costco resumed selling Coca-Cola products the following month. Although the brand engages in visible efforts to reduce costs, the stores themselves are expensive. In 2013, Costco spent approximately $80million on each of the new stores it opened. The cost is partly driven by the cost of real estate, as each new store means that they need enough space to support a building of approximately in size, a large parking lot, and often a gas station. Lighting costs are reduced on sunny days, as most Costco locations have several skylights. During the day, electronic light meters measure how much light is coming in the skylights and turn off an appropriate percentage of the interior lights. During an average sunny day, it is normal for the center section of the warehouse not to have interior lights in use. The company has no public relations department and does not buy outside advertising. A typical Costco warehouse carries only 3,700 distinct products, while a typical Walmart, Walmart Supercenter carries approximately 140,000 products. Like many other retailers Vertical integration, vertically integrating their food supply chains, Costco has brought in-house poultry production for their rotisserie chickens, which are a major driver of customer traffic and sales. This is to allow keeping their pricing intact while maintaining a consistent quality control of its chickens as a result of annual growth of per-capita chicken consumption in the United States. Costco is known for its "exit greeters", who briefly compare receipts against shopping cart contents as customers exit. They are trained to quickly count cart contents and serve as a form of customer service to verify that customers were charged correctly, have redeemed any voucher-based items (e.g., tickets), and have not missed items placed in their cart's lower racks. Costco has used exit greeters since its first store in 1983.
Online shoppingCostco primarily focuses on getting members to come in to a warehouse for purchases, instead of ordering products online. Due to the COVID-19 pandemic, Costco's online sales increased dramatically, with more online sales growth in 2020 than the previous 5 years combined. The company opened its online shopping site at ''Costco.com'' on April 17, 2001. Costco.com is for United States members; costco.ca is for Canadian members, and other countries, such as Mexico, South Korea, Taiwan and the UK, each have their own online Costco shopping website. Instacart offers Costco delivery in a select number of states including Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Massachusetts, Maryland, Minnesota, Missouri, North Carolina, New Jersey, New York, Oregon, Tennessee, Texas, Virginia, Washington, and the District of Columbia. No membership is needed to order from Costco on Instacart, but Instacart charges delivery fees and the prices may not necessarily be the same as in a Costco warehouse. Similarly, in March 2017, Costco initiated a partnership with Shipt, an online grocery delivery service. Unlike Instacart, Shipt charges its own membership fee, $99 a year or $14 a month, in exchange for free delivery on orders over $35. , Shipt offers Costco delivery in select Florida markets. In October 2017, Costco launched same-day and two-day grocery delivery options for members.
ProductsCostco has a frequently changing inventory and is known for carrying products for a time, then discontinuing them or using them as seasonal products. Over the years, Costco has gradually expanded its range of products and services. Initially, it preferred to sell only boxed products that could be dispensed by simply tearing the stretch wrap off a pallet. It now sells many other products that are more difficult to handle, such as art, books, caskets, clothing, Software, computer software, fine wine, furniture, home appliances, home electronics, hot tubs, jewelry, perishable items (such as dairy, fresh baked goods, flowers, fresh produce, meat, seafood), solar panels, tires, and vacuum cleaners. Many warehouses also have Filling station, gas stations, pharmacy, pharmacies, hearing aid centers, optometry, optometrists, eye and sunglass centers, photographic processing, photo processors, and tire Automobile repair shop, garages. The produce items that require refrigeration are kept in a walk-in refrigerator, and several locations even have a walk-in refrigerator for dairy items. Some locations have liquor stores, often kept separate from the main warehouse in order to comply with liquor license restrictions. In some states (such as Texas), the liquor store must be owned and operated by a separate company with separate employees. In 2006, Costco lost a lawsuit against the state of Washington in which it was seeking to purchase wine directly from the producer, bypassing the Alcoholic beverage control state, state retail monopoly. In Australia, Costco has to comply with regulations set by each state they choose to trade in; their first store in the Australian state of Victoria (Australia), Victoria benefits from some of the most liberal alcohol licensing laws in that country, with retailers permitted to sell alcohol on shelves within the store, in a manner similar to most European countries. In the Canadian province of Quebec, beer and wine are sold within the stores from pallets.
Kirkland Signature"Kirkland Signature" is Costco's private label. It is sold by Costco at their website and warehouses, and is trademarked by the company. Costco introduced Kirkland Signature as its private label in 1992, deriving the name from the location of Costco's then corporate headquarters, Kirkland, Washington (their headquarters later moved, roughly , to Issaquah, Washington). It accounts for almost a third of all Costco sales and is growing faster than Costco sales. Many Kirkland Signature products are produced by the same manufacturers as their respective name brands. For example, Kirkland branded bottled water is produced by private label bottler Niagara Bottling, and some of Kirkland's branded coffee is roasted by Starbucks. The idea for the private label was to provide the appearance of brand name quality products at discounted prices. To counteract the consumer confidence problem common in store-name branding, Kirkland Signature occasionally employs co-branding. According to Costco, while consumers may be wary of same-store branding, they are less likely to be wary of brands that they are familiar with and trust.
''Costco Connection''''Costco Connection'' is a magazine sent free to the Costco executive members; it can also be accessed online by anyone, free of charge. Until the end of 2018, the magazine was known as ''The Costco Connection''. But with the January/February 2019 issue, "the", the definite article was dropped from the name and now the magazine is known as just ''Costco Connection''. The magazine was established in 1987 as a newsprint publication and converted to a magazine in 1997. It features articles which regularly tie into the corporation along with business, celebrity features, cooking, entertaining, health, home improvement, and social articles, as well as coupons and ads. MediaPost reports: "While about 90% of the magazine's advertising is co-op, increasingly national advertisers such as Procter & Gamble are buying space, notes Roeglin -- presumably because of the pub's gargantuan reach and the data it has on its subscribers (whose average household income is $156,000 a year). 'We see about 56% of our subscribers a month buy something at one of our stores based on something they've read in the magazine,' says Roeglin." The magazine is one of the largest-circulation print monthlies in the United States and presently is the third in circulation figures in the United States after ''AARP The Magazine'' and ''AARP Bulletin''.
Other publicationsCostco also publishes the ''Costco Household Almanac'', an annual edition started in 2007. The 200+ pages almanac carries a lot of helpful tips to Costco readers and carries ads from suppliers. Costco also publishes a cookbook series.
Concierge serviceCostco offers a free "concierge" service to members who purchase electronics, to help answer questions regarding setup and use and avoid potential returns due to not understanding how to use the products.
Costco Auto ProgramIn 2020, Costco Auto Program Approved Dealerships sold nearly 700,000 vehicles to Costco members. Costco Auto Program regularly teams up with various automobile manufacturers to offer special deals to customers, e.g., Chevrolet, Buick, GMC, Cadillac, Audi, Volvo, Mercedes Benz, Honda, Subaru and many more during the past five years. MSN reports, Costco members saved an average of $1,100 to $1,200 off the average transaction price for their vehicle in their local market. ''KSAT.com'' says it's simple to use Costco Auto Program. All you have to do is go to the Costco Auto Program webpage and you can browse the available vehicles, calculate monthly payments, and read reviews. You can also call the company’s customer-service line to have an employee walk you through the process over the phone. There are a variety of vehicle segments, including sedans, sports cars, SUVs, trucks, and crossovers. Once you provide your contact info and Costco membership number, you can go to participating dealership and you can buy or lease the vehicle with the Costco discount. In addition, members are also able to get a 15% discount on parts, service, and accessories at participating service centers.
Costco Auto and Home InsuranceCostco has an agreement with Connect (insurance company), CONNECT, powered by American Family Insurance, for Vehicle insurance, auto insurance, home insurance and Umbrella insurance, umbrella insurance.
Costco business servicesOn March 9, 2005, NOVA Information Systems (NOVA) partnered with Costco to market and support payment processing services to Costco Canada's Business Executive Members. Costco acts as an Stockbroker, investment broker and travel agency, travel agent.
Costco photo servicesCostco Photo Center is a multi-functional photography printing service offering photo items through its website, costcophotocenter.com. The website provides free unlimited digital file storage with a current membership. Prior to February 14, 2021, in-store photo centers offered many services such as same day photo printing (on select sizes/material) and online order pickup. In-store service/pickup is no longer offered, as all in-store photo centers closed permanently on February 14, 2021. In December 2005, Costco signed an agreement with PhotoChannel Networks Inc., whereby Costco could deploy the PNI Digital Media Platform to offer online photo printing for Costco members through the website. Prior to May or June 2010, Costco had an agreement with Mypublisher.com for custom book and calendar publishing. Photo-books and calendars are now processed through multiple external vendors. Canvases are processed and printed by ''Your Photo on Canvas (''ypoc.com), a Costco exclusive vendor. On July 17, 2015, Costco disabled their online photo site. In common with other retailers, there is currently no confirmation about whether hackers had stolen Costco customers' photographs or data. , Costco was estimating the website might return in mid-August, after a four-week outage. On January 13, 2021, Costco announced that it would permanently be closing the Photo Centers in all its locations by February 14, 2021. Many of the services are still available for home/business shipping, though in-store ink refills and passport photography were discontinued.
Costco OpticalCostco Optical ranks as the fifth-largest optical company in the US, . Optometry, Optometrists working at Costco locations will see patients without Costco memberships, although a membership is required to fill a prescription at the optical department.
Costco TravelCostco Travel is a wholly owned subsidiary of Costco Wholesale and offers leisure travel to Costco members of the United States and Canada. The program was established in 2000 as a service to Costco members. Costco Travel's offices are located in Issaquah, Washington, adjacent to Costco's corporate headquarters. Costco Travel employs over 700 travel professionals, all of them Costco employees. The program offers vacation packages to the Caribbean, Europe, Florida, Hawaii, Las Vegas, Mexico, and the South Pacific. Other products include car rentals, cruises, guided vacations, and theme park packages. Select products feature additional benefits for Costco Executive Members. The program is marketed directly to Costco members through various Costco avenues, including the ''Travel Guide to Savings'' (found in all U.S. Costco warehouses) and in the Travel section of Costco.com.
Food serviceMost, if not all, Costco locations have a food court. They can be indoors or outdoors, but the menu is essentially the same: hot dog with drink (one of the most popular items), pizza, frozen yogurt/ice cream, Pepsico beverages, baked items, and sandwiches. Sometimes, items are added to the menu seasonally. Costco offers a quarter-pound 100% beef hot dog and drink (with refills) for , the same price since 1985. Some US locations also offer Kielbasa, Polish sausage or bratwurst in addition to hot dogs, at the same $1.50 price. In Australia, the hot dog is made of pork and is sold with a large soda for Australian dollar, AUD$1.99. In Canada, the price for a hot dog and soda with refills is Canadian dollar, C$1.50. In Mexico, the hot dog is made of 100% beef and includes a drink (with refills) for Mexican peso, MXN$35. In the UK, the hot dog is also made from beef and customers also get a drink (with refills) for Pound sterling, £1.50. Costco sold more than 137million quarter-pound (113 g) hot dogs in its food courts in 2017. In Taiwan and Japan, the hot dog is made of pork as well. As of January 2021, cheese or pepperoni pizza (along with pre-ordering of full pizzas to take home), chicken bakes, ice cream (vanilla), ice cream sundae (vanilla, with very berry or chocolate sauce toppings), fruit smoothies, latte freeze (without chocolate), mocha freeze (with chocolate), and twisted churros (in select stores) are offered at all United States locations. Some food court items are only available in certain countries. For example, the bulgogi bake and mango boba tea are only available in Australia, Taiwan, Korea, and Japan; poutine is only available in Canada. There are, however, temporary menu items available exclusively in several countries, like the Al pastor, pastor taco-topped pizzas in Mexico. The nutrition data for the Costco Food Court items is posted online and in store. Past menu items include veggie and combo pizza, frozen yogurt (chocolate, vanilla, or swirl), beef bake, turkey provolone sandwiches, chicken Caesar salads, beef brisket sandwiches, organic beef-based cheeseburgers, beef chili with beans, and in some locations, gelato. Due to slow sales, in 2009, the pretzel was replaced by the churro. In April 2013, Pepsi replaced all Coca-Cola fountain drinks at U.S. locations because Coke had raised its prices; this helped keep the hot dog combo with soda at its original price. In select Costco food courts, Costco was selling cheeseburgers for a limited time to experiment sales. The cheeseburger was not successful, and never spread to more than a few locations. In early 2020 (due to the Coronavirus disease 2019, Coronavirus outbreak), many locations suspended all food court operations within the warehouse, opening them up weeks later to a limited take-out only menu and replacing fountain sodas with canned beverages. Many locations have had their seating area removed. As of January 2021, all United States locations are open for partial service (with a changed menu). Payment card-only self-checkout systems have also been added to the food courts, allowing employees to focus solely on serving, and removing the exchange of paper and coin money. Seating was also restored in many locations.
Costco credit cardOn April 1, 2016, in US, Citigroup became the exclusive issuer of Costco's branded credit cards. Prior to that, Costco credit cards had been issued by American Express since 2001, and Costco accepted ''only'' American Express cards for credit transactions. After the switch of its co-branded cards to Citi, Costco ceased accepting AmEx and began accepting Visa. AmEx cited the reason for the split that Costco was asking for lower transaction fees than AmEx was willing to grant. In Canada, Costco ended its AmEx relationship in 2014, and starting in 2015, it partnered with Capital One Mastercard for branded credit cards. In 2020, Capital One announced it would be ending the partnership in late 2021. It was announced that beginning in March 2022, Costco will begin it's partnership with CIBC Mastercard. Costco branded credit cards from both issuers also serve as alternate Costco membership cards, with a customized reverse side containing membership info.
Costco Audiobook AppIn March 2021, Costco started selling audiobooks and launched a corresponding iOS and Android app to listen to purchases. The app is free, however the books are exclusive to Costco members. The retailer sells audiobooks in bundles grouped by genre or author, with prices ranging from $5 to $50. Audiobooks are currently only available at U.S. locations.
Employee rightsWhile some former Price Club locations in California and the northeastern United States are staffed by Teamsters, the majority of Costco locations are not unionized, although there seemed to be a move in 2012 to unionize some locations in Canada. The Teamsters claim that over 15,000 Costco employees are union members. The non-union locations have revisions to their Costco Employee Agreement every three years concurrent with union contract ratifications in locations with collective bargaining agreements. The Employee Agreement sets forth such things as benefits, wages, disciplinary procedures, paid holidays, bonuses, and seniority. The Employee Agreement is subject to change by Costco at any time and offers no absolute protection to the workers. , non-supervisory hourly wages ranged from $16.00 to $27.75 in the U.S., $16.00 to $28.70 in Canada, and £9.75 to £13.90 in the United Kingdom. In the U.S. , eighty-fivepercent of Costco's workers had health insurance, compared with less than fifty percent at Walmart and Target. Health benefits include coverage through Aetna, remote primary care through Teladoc, second opinions and clinical navigation by Grand Rounds, Inc., Grand Rounds, and wellness coaching by Omada. In February 2021, Costco announced that it would be raising the starting rate for its hourly store workers in the United States to $16 an hour. Costco has been actively raising their minimum wage starting with $14 during 2018, and into $15 during 2019. They further add that 20% of their hourly employees will be subject to the minimum wage change.
ContractorsProduct-demonstration (e.g., food sampling, food samples) employees work for an independent company. In the western U.S., the company is called Warehouse Demo Services, Kirkland, Washington. Costco also uses Club Demonstration Services (CDS), based in San Diego, California. Demonstration employees receive a pay and benefit package that is less than that of Costco employees. , demonstrations/samples are provided by CDS in Canada.
Public healthFollowing the Coronavirus disease 2019, COVID-19 outbreak, the first Costco store in Perth, Australia, unexpectedly opened on March 19, 2020, without an opening ceremony and earlier than its planned time of 8:00AM due to high demand, especially for toilet paper products, to ease panic buying in mainstream supermarkets in Australia, although toilet paper was limited to only one per transaction. Carts and other objects were cleaned regularly to minimize the risk of contracting the virus. As of March 6, 2020, Costco contractor CDS has temporarily stopped providing free food samples in several Costco stores globally amid public health concerns regarding Coronavirus disease 2019, COVID-19. On December 23, 2020, a Costco store in Cuernavaca Municipality, Cuernavaca, Morelos, Mexico, was forced to temporarily close after the store ignored restrictions on store capacity.
Costco HomeThe first Costco Home warehouse opened in 1983, and was rebuilt / expanded in 2002, in Seattle. The warehouse's concept was to combine the value, setting and members-only elements of Costco's warehouse clubs with the product array one would find at an upscale home store, such as Fortunoff or Crate & Barrel. The Costco Home warehouses sold furniture, housewares, kitchen products and accessories from higher-end brands such as Lexington, Polo Ralph Lauren, Ralph Lauren and Waterford Crystal, Waterford in a warehouse-club setting. Costco claimed that, similar to its main warehouses, it accepted lower margins in return for greater volume with minimal overhead. Over time, the concept was adjusted to include home electronics, some major appliances, office furniture, and a large selection of outdoor furniture and window treatments. Costco also partners with Glentel subsidiary WIRELESS etc. to sell mobile phones and plans in Canada and Wireless Advocates in the US. On April 2, 2009, the company announced that it would be abandoning its Costco Home concept, closing the two existing stores in Kirkland, Washington and Tempe, Arizona on July 3, 2009, and abandoning plans for a third store on the West Coast. The company cited cutbacks in consumer spending on home products and its interest in focusing on its core business as the main reasons.
ControversiesIn 2010, Mercy for Animals conducted an undercover investigation at Buckeye Veal Farm, a veal supplier to Costco. Immediately following the investigative release, Costco adopted a policy against purchasing veal from producers that use the crate-and-chain production method. The case prompted Ohio lawmakers to vote in favor of a veal crate phase-out in the state. In 2012, Mercy for Animals conducted another undercover investigation of a pork supplier to major retailers such as Costco, Walmart, Safeway Inc., Safeway, Kroger, and Kmart. Before the public release of the investigation, Costco announced they would begin requiring their pork suppliers to phase out gestation crates. In 2014, ''The Guardian'' reported that Costco is a client of Charoen Pokphand Foods. Over six months, ''The Guardian'' traced down a supply chain from slave ships in Asian waters to leading producers and retailers. Costco has published a statement saying it has had a supplier code of conduct since 1999 which does not allow this practice, and that independent auditors check for violations regularly. In 2015, The Humane Society of the United States conducted an undercover investigation at an egg supplier to Costco. An undercover worker at Hillandale Farms, a major egg supplier to Costco, filmed conditions in which egg-laying hens lived in Battery cage, tiny, wire cages. Following the investigations, several celebrities including Brad Pitt and Ryan Gosling publicly wrote to Costco to address this issue. Following efforts by animal protection nonprofits including The Humane League, Costco released an updated commitment to source exclusively cage-free eggs in its operations. In 2016, a follow up to Costco's shift to cage-free eggs by animal rights group Direct Action Everywhere (DxE) reported cannibalism and high mortality at a cage-free Costco egg supplier. Costco denied the allegations, but the video sparked a discussion about animal welfare problems continuing to exist at cage-free egg farms. Writing in ''The Huffington Post'', DxE co-founder Wayne Hsiung argued that the new investigation, rather than suggesting that Costco should keep birds in cages, indicated that hens should have the right not to be raised for food or kept on farms at all. In August 2017, a federal judge ordered a "deceptive" Costco to pay Tiffany & Co. $19.4million for misleading consumers into thinking they could buy legitimate Tiffany merchandise at warehouse club prices. Costco was criticised in 2019 by the Natural Resources Defense Council and SumOfUs, Sumofus for using virgin Canadian Boreal forest of Canada, boreal forest to make its toilet paper. NRDC says that over the last twenty years, 28 million acres of Canadian boreal forest have been cut down to make toilet paper. In September 2020, CBS News reported that Costco has stopped selling Palmetto Cheese after the owner of the pimento cheese brand called Black Lives Matter a "terror organization." Costco posted a note to the item in their Myrtle Beach location indicating that the item will not be reordered, and over 120 Costco's throughout the US will no longer be carrying the item. In October 2020, Costco dropped Chaokoh coconut milk over the allegations of forced monkey labor. PETA accused the manufacturer, Theppadungporn Coconut Co., of using forced monkey labor, finding cruelty to monkeys at their farms and facilities. Ken Kimble, Costco's Vice President of Corporate Food and Sundries, stated Costco has launched an investigation regarding the issue and have ceased purchasing from the supplier/owner of the brand Chaokoh condemning the use of monkey labor. Kimble also stated that Costco will continue to monitor the implementation of the harvest policies and once satisfied will resume purchasing. In December 2020, Costco announced plans to disuse caged eggs throughout its operations worldwide. It became the first US retailer to issue a global policy on the confinement of animals in its supply chain. Josh Dahmen, Costco financial planning and investor relations director also said that "We are in the process of making that transition to cage-free eggs. We will continue to increase the percentage over time, with a goal of eventually getting to 100%."
See also* Bulk foods