Costco’s Chairman, Hamilton “Tony” James, recently shared insights into the company’s surprising success in selling high-end items, revealing that a Porsche dealer’s cars sold out within a week at a Seattle store. This example, highlighted in Chief Executive Magazine, underscores Costco’s ability to move luxury goods due to its focus on quality and competitive pricing.
James, a board member since 1988, emphasized that Costco’s strategy caters to both budget-conscious and affluent consumers. The company has successfully sold diverse luxury items, including Rolex watches, Dom Perignon champagne, and gold bars. The rapid sale of the Porsches in Seattle exemplified this, showcasing the appeal of a good deal to a wide range of shoppers.
“Since the beginning, we’ve always known we could move anything in volume if the quality was good and the price was great—Rolex watches, Dom Perignon, 10-karat diamonds. A Porsche dealer in Seattle put their cars on the floor of a Costco, and they sold out in a week. Affluent people love a good deal,” James stated.
Costco’s strategic approach involves closely monitoring its competitors, from smaller supermarkets to online retailers. Simultaneously, the company has opened six new stores nationwide, aiming to surpass 900 locations globally, demonstrating robust growth. This expansion follows strong financial results, with reported net sales of $19.51 billion in January, a 9% increase year-over-year.
Currently, Costco operates 897 warehouses worldwide, with 617 located in the U.S. and Puerto Rico. The additional stores will push the company over the 900-store mark. The company’s international presence also includes locations in Canada (109), Mexico (41), Japan (36), U.K. (29), Korea (19), Australia (15), Taiwan (14), China (7), Spain (5), France (2), and one store each in in Iceland, New Zealand, and Sweden.
In a separate matter, Costco’s handling of a recent nationwide egg shortage has drawn criticism from some customers. Reports indicated that some shoppers expressed anger over the egg prices during the shortages. This came after the produce hit a record high in the U.S. due to ongoing bird flu outbreaks and some shoppers had to pay as much as $18.69 for five dozen eggs.
