retail news in context, analysis with attitude

Costco announced yesterday that it will stop accepting the American Express card in its US stores on March 31, 2016, ending a longtime exclusivity that one analyst said generated as much as eight percent of Amex's annual revenue and 10 percent of its cards.

Amex said that it had been negotiating with Costco to continue their exclusive arrangement but had been unable to make the deal.

Costco made a similar decision last year for its Canadian stores, and it had been broadly speculated that it would make the same move in the US. In Canada, it is replacing Amex with Capital One and MasterCard, and once again, the speculation is that a similar decision will be reached for its 470 stores in the US.

USA Today writes that "Costco, where customers tend to buy in bulk, will be in the driver’s seat as it negotiates with its next credit card partner. Selling a wide range of goods from fresh produce and gasoline, the retailer has a loyal base of members who pay annually to be able to enter the store and shop."
KC's View:
This is all about power ... and it seems pretty clear that Costco has a lot more of it than Amex.