Why Costco Is So Damn Addictive Jessica McIntosh Zhengyuan Jiang

Costco's Warehouses The fourth-largest retailer in the country seventh-largest in the world $59 billion in sales 488 warehouse locations No.28 in the FORTUNE 500

Members of Costco 48 million members – averaging 22 trips a year many affluent members – incomes over $75,000 $55 per year for households $110 per year for small businesses

Products Costco – 3,000 regular items – 1,000 items that always changing Wal-mart supercenter – 150,000 items

Mr. Sinegal's cardinal rules Costco – Branded items mark-up 14% – Private-label items mark-up 15% Supermarkets – 25% mark-ups Department stores – 50% or higher mark-ups

To be Costco's Employees $17 an hour (42 percent higher than its fiercest rival, Sam's Club) Costco's health plan (makes those at many other retailers look Scroogish). "It's better to be an employee or a customer than a shareholder."-- Bill Dreher of Deutsche Bank

Managers of Costco "Our managers are entrepreneurs, not somebody who just comes in and unlocks the doors." Indeed, with some locations doing upwards of $300 million in sales a year,each ware- house is a mini-corporation, and each manager a de facto CEO." --Costco CEO Jim Sinegal

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Sources Why Costco is so Damn Addictive – How Costco became the Anti-Wal- Mart – ney/17costco.html?pagewanted=all ney/17costco.html?pagewanted=all Costco raises membership fees; profit misses view – costco-idUSTRE7942D costco-idUSTRE7942D