About Costco Wholesale

Costco Wholesale Corporation and its subsidiaries (Costco) principally engage in the operation of membership warehouses in the United States (U.S.) and Puerto Rico, Canada, Mexico, Japan, the United Kingdom (U.K.), Korea, Australia, Taiwan, China, Spain, France, Iceland, New Zealand, and Sweden. Costco operated 861 warehouses worldwide as of September 3, 2023. The company operates e-commerce websites in the U.S., Canada, Mexico, the U.K., Korea, Taiwan, Japan, and Australia. The material seasonal impact in the company's operations is increased net sales and earnings during the winter holiday season. The company operates membership warehouses and e-commerce websites based on the concept that offering the company's members low prices on a limited selection of nationally-branded and private-label products in a wide range of categories will produce high sales volumes and rapid inventory turnover. The company often sells inventory before the company is required to pay for it, even while taking advantage of early payment discounts. The company buys most of its merchandise directly from suppliers and route it to cross-docking consolidation points (depots) or directly to the company's warehouses. The company's depots receive large shipments from suppliers and quickly ship these goods to warehouses. This process creates freight volume and handling efficiencies, lowering costs associated with traditional multiple-step distribution channels. The company's e-commerce operations ship merchandise through its depots and logistics operations, as well as through drop-ship and other delivery arrangements with the company's suppliers. The company's strategy is to provide its members with a broad range of high-quality merchandise at prices are consistently lower than elsewhere. The company seeks to limit most items to fast-selling models, sizes, and colors. The company carries less than 4,000 active stock keeping units (SKUs) per warehouse in the company's core warehouse business, significantly less than other broadline retailers. The company averages anywhere from 9,000 to 11,000 SKUs online, some of which are also available in the company's warehouses. The company offers merchandise and services in the following categories: Core Merchandise Categories (or Core Business): Foods and Sundries (including sundries, dry grocery, candy, cooler, freezer, deli, liquor, and tobacco). Non-Foods (including major appliances, electronics, health and beauty aids, hardware, garden and patio, sporting goods, tires, toys and seasonal, office supplies, automotive care, postage, tickets, apparel, small appliances, furniture, domestics, housewares, special order kiosk, and jewelry). Fresh Foods (including meat, produce, service deli, and bakery). Warehouse Ancillary (includes gasoline, pharmacy, optical, food court, hearing aids, and tire installation) and Other Businesses (includes e-commerce, business centers, travel, and other). Warehouse ancillary businesses operate primarily within or next to the company's warehouses, encouraging members to shop more frequently. The number of warehouses with gas stations varies significantly by country, and the company has no gasoline business in Korea, China, or Sweden. The company operated 692 gas stations as of September 3, 2023. The company's other businesses sell products and services that complement the company's warehouse operations (core and warehouse ancillary businesses). The company's e-commerce operations give members convenience and a broader selection of goods and services. The company's business centers carry items tailored specifically for food services, convenience stores and offices, and offer walk-in shopping and deliveries. Business centers are included in the company's total warehouse count. Costco Travel offers vacation packages, car rentals, cruises, hotels, and other travel products exclusively for Costco members (offered in the U.S., Canada, and the U.K.). The company has direct buying relationships with many producers of brand-name merchandise. The company also purchases and manufactures private-label merchandise. Membership The company's members may utilize their memberships at all of the company's warehouses and websites. Gold Star memberships are available to individuals; Business memberships are limited to businesses, including individuals with a business license, retail sales license, or comparable document. Business members may add additional cardholders (affiliates), to which the same annual fee applies. Competition Walmart, Target, Kroger, and Amazon are among the company's significant general merchandise retail competitors in the U.S. The company also competes with other warehouse clubs, including Walmart's Sam's Club and BJ's Wholesale Club in the U.S. Intellectual Property The company has invested significantly in the development and protection of the company's well-recognized brands, including the Costco Wholesale trademarks and the company's private-label brand, Kirkland Signature. History Costco Wholesale Corporation was founded in 1976. The company was incorporated in 1987.