retail news in context, analysis with attitude

The Seattle Times reports on how, even at a time when Walmart is shutting down 10 percent of its fleet of Sam’s Club membership warehouse stores, Costco is “thriving.

“Its sales and profits are surging. Traffic to its stores, an important indicator of the health of the business, grew 5.9 percent in the last quarter, the fastest clip in at least a decade. Costco members - whose annual fees make the company profitable - remain fiercely loyal, renewing at a rate of 87 percent even after fees were raised.”

At the company’s annual shareholders’ meeting in Bellevue, Washington, this week CEO Craig Jelinek said that “reports that millennials are not joining Costco are ‘not accurate,’ and that millennials represent “over 40 percent of its new-member signups.”

“They don’t spend the money like the boomers do,” Jelinek said. “But they are signing up, and we’re hopeful that as boy meets girl, buys house, that will continue to go through their life cycle.”

While Jelinek said that the company is adapting to an Amazon world and expanding its online offerings, he also said that “we … want to bring people into our Costcos.”
KC's View:
Only a fool would suggest that Costco is going away anytime soon … just as only a fool would suggest that it won’t have to evolve to meet the demands and needs of a younger customer base.

I’m not sure that “bringing people into Costco” ought to be the endgame here. That strikes me as a narrow focus.

And one other thing. A small thing, but I noticed it. In today’s world, it seems limiting when you say “boy meets girl.” It also can be “boy meets boy,” or “girl meets girl.” I’m not trying to be politically correct, but just trying to acknowledge that America looks different today than it used to.

Pew Research says that “fewer than half (46%) of U.S. kids younger than 18 years of age are living in a home with two married heterosexual parents in their first marriage. This is a marked change from 1960, when 73% of children fit this description, and 1980, when 61% did … Americans are delaying marriage, and more may be foregoing the institution altogether. At the same time, the share of children born outside of marriage now stands at 41%, up from just 5% in 1960."

These can be Costco’s customers, too. I know Amazon wants them.

It just requires some broader thinking.