Costco is a popular American wholesale retail chain that was founded in 1983.
The company has its headquarters in Seattle, Washington, and is listed on the Fortune 500.
Costco is the 5th largest retailer in the world and operates as a membership-only store.
There are over 800 locations throughout the world.
The company has stores in Europe, Asia, North America, South America, and Oceania.
They also have a popular online store that competes with other eCommerce retailers.
Costco is listed on the New York Stock Exchange under the ticker symbol Cost.
It is included on the stock market index the S and P 100 component.
In 2019, the company reported revenue of $152.7 billion.
The operating income for the same period was $4.74 billion so its no wonder why there are multiple Costco competitors.
Over 250,000 people are working for Costco and its membership boasts over 105 million people.
The membership is sold as an annual subscription which allows customers to shop in any of its stores.
Customers are then able to shop at significant discounts thanks to Costcos nature as a wholesaler.
Costco’s Biggest Competitors
Costco brings in most of its revenue through the sale of goods in its store and online.
The stores have a wide range of stock including Costco-owned brands such as Kirkland Signature.
Costco aims to give consumers access to quality products at a cheaper price than its competitors.
The range of products Costco offers includes pharmaceuticals, clothes, appliances, food, sundries, fresh produce, and gasoline.
Most Costco locations have a gas station attached and gasoline sales make up around 11% of revenue for the business.
Costco also draws in a portion of its income through the fees raised through the membership.
Everyone has to purchase a membership to be able to shop at Costco.
The decision to introduce this membership was as a way to better control stock levels and avoid waste.
The membership is charged annually and has an over 90% renewal rate in North America.
This membership brings in a small, but guaranteed, additional stream of revenue for the business.
Now let’s take a look at some of Costco’s competitors and alternatives:
- Walmart – The largest retailer in the world.
- Kroger – The third-largest retailer in the world
- Schwarz Group – German-owned supermarkets and the fourth-largest retailer in the world.
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Costco Competitors: Walmart
Walmart was founded in 1962 by Sam Walton and continues to be owned by the Walton Family.
They grew the business from one discount store in Rogers, Arkansas to the largest retailer in the world.
Around 265 million customers pass through Walmart stores every week thanks to its discount pricing and great locations.
The company has over 11,000 stores around the world but its flagship Walmart business only operates in North America.
The company offers a wide range of products which makes it a great place for all of your shopping needs.
Walmart is the largest company in the world in terms of revenue. In 2021, the company posted total revenue of $559.2 billion.
This also gave them an operating revenue of $22.55 billion, up from the previous year.
The company has been listed on the New York Stock Exchange since 1972. You can find it under the ticker symbol WMT.
In recent years the company has expanded its online offerings.
Through its service Walmart Pickup, customers can shop online and pick up their shopping at a Walmart store.
Costco Competitors: Kroger
Kroger is a much older business than Costco and Walmart.
It was founded by Bernard Kroger back in 1883 and currently has its headquarters in Cincinnati, Ohio.
The company has around 3,000 locations in the United States.
It is the third-largest retailer in the world, behind only Costco and Walmart.
Unlike its competition, Kroger doesn’t have international stores. Its physical stores are responsible for around 97% of total revenue.
Many of Kroger’s physical locations contain pharmacies and gas stations. Like Walmart, Kroger offers a pickup service.
The company also has its own brands that it sells in-store, these include Heritage Farms, The Kroger Brand, and Private Selection.
The company is listed on the New York Stock Exchange under the ticker symbol KR.
They are included in the stock market index the S and P 500 component.
In 2019, the revenue for the company was $121.16 billion and operating income was $2.67 billion.
Costco Competitors: Schwarz Group
Schwarz Group is a German-owned company that operates the stores Kaufland and Lidl.
The company is one of the most popular supermarkets in Europe and also has a footprint in the U.S.
Its stores can be located in 30 countries around the world and they have around 12,000 stores in Germany alone.
The group has hypermarkets, supermarkets, discount stores, and food businesses as part of its portfolio.
The company has its headquarters in Neckarsulm, Baden-Württemberg, Germany.
It is the fourth-largest retailer in the world in terms of revenue.
The company is privately held so is not obligated to share its financial information.
In 2019, the reported revenue for the company was € 113.3 billion. Over 450,000 people are working for the Schwarz Group.
Costco has an advantage over its competitors through its membership. It is a requirement that everyone who wants to shop at Costco apply for membership.
This helps the company to scale its business and avoid wasting products.
The membership also provides the business with an additional stream of revenue that its competitors don’t have.
The company is able to offer discounts due to its wholesale nature.
With around a 90% retention rate the membership is the perfect way to gauge customer interest.
Costco Competitors and Alternatives: Final Thoughts
Costco has to compete with the world’s most successful businesses.
On the retail storefront, Walmart and Kroger have a large portion of the market share between them.
Online, Costco has to compete with eCommerce giants like Amazon.
The company has done well to establish itself among these competitors.
By offering a membership, Costco feels more exclusive.
The discounts the company offers are hard to compete with so Costco will remain a popular destination for consumers.