Costco Wholesale Corporation
Costco Wholesale Corp. operates a membership-based warehouse club business that sells a broad mix of food, consumables, general merchandise, and selected services through large-format warehouses and e-commerce. The company also runs related businesses such as gasoline stations, pharmacy, optical, food court, hearing aids, tire installation, travel, and business centers across the United States and multiple international markets.
Fiscal year 2026 · change from previous year
Development 2021–2026
Business
Share of revenueCore grocery and consumables assortment including dry grocery, candy, freezer, liquor, and tobacco.
Perishable food offerings such as meat, produce, deli, and bakery items.
General merchandise spanning appliances, electronics, apparel, home goods, seasonal, and jewelry.
Adjacent services and traffic drivers including gasoline, pharmacy, optical, food court, hearing aids, and tire installation.
Complementary businesses including e-commerce, business centers, travel, and other member services.
Products
Reported · share of revenue- Foodand Sundries38.5 %
- Non Foods25.5 %
- Other20.2 %
- Fresh Food13.8 %
- Membership1.9 %
Source: 10-K FY2026, revenue the company reports per product line (SEC XBRL). Shares are of the lines shown and add up to 100 %.
Customers
Costco serves paid members rather than open walk-in shoppers, with memberships available to individuals and businesses. Its customer base includes households buying everyday consumables, business members purchasing in bulk for resale or operations, and members seeking bundled services such as fuel, pharmacy, travel, and online convenience.
Individual consumers and families buying food, sundries, and general merchandise for everyday use and stock-up trips.
Businesses buying bulk inventory, supplies, and services for resale, offices, food service, and operations.
Higher-spending members who earn rewards and typically drive a large share of net sales.
Members buying online or through digitally initiated orders for convenience and broader assortment.
Members purchasing vacation packages, car rentals, cruises, and in-warehouse services.
Strategy
Costco’s strategy is to attract and retain members by offering a limited assortment of high-quality merchandise at consistently low prices. It uses a membership model, private label strength, and large-format warehouse economics to drive traffic, repeat visits, and recurring fee income while expanding the warehouse base and digitally enabled businesses.
New warehouses create incremental member access and support long-term sales growth.
Higher renewal rates and Executive penetration reinforce recurring fee income and loyalty.
Kirkland Signature helps differentiate the basket and support member value perception.
E-commerce, travel, and digitally initiated sales broaden the member proposition without changing the core club model.
Geography
Costco operates in the United States and in a broad set of international markets, with the U.S. and Canada representing the most important parts of the business. The company also serves members in markets such as Mexico, the U.K., Japan, Korea, Taiwan, and Australia through warehouses, e-commerce, and selected services. Geography matters because warehouse growth, currency movement, tariffs, and local membership economics affect sales mix and operating conditions by country.
Risks
Costco faces intense competition from warehouse clubs, supermarkets, supercenters, online retailers, gasoline stations, and specialty merchants, which can pressure pricing, traffic, and membership growth. Its results are also exposed to supplier concentration risk, tariffs, foreign exchange, and the heavy dependence of the business on the U.S. and Canadian markets, especially California.
- Intense retail and warehouse-club competitionImpact: HighLikelihood: High
Competitors can match prices, convenience, assortment, or digital tools and take share.
Exposure - Dependence on U.S. and Canadian operationsImpact: HighLikelihood: High
A large share of sales and operating income comes from these markets, making performance concentration high.
Exposure - Supply-chain and supplier disruptionImpact: HighLikelihood: Medium
Limited availability, quality issues, or supplier distress can reduce in-stock positions and increase costs.
Exposure - Tariff and trade policy exposureImpact: MediumLikelihood: High
Government actions in China, Mexico, Canada, and the U.S. can increase merchandise costs.
Exposure: imported merchandise
- Foreign exchange volatilityImpact: MediumLikelihood: High
International operations create translation and pricing exposure when currencies move.
Exposure: international warehouses
Accounting
Judgemental itemsRecurring annual fees are central to profitability and must be recognized over the membership term.
Impact: Revenue timing and fee income visibility
Large inventory purchases and supplier terms affect cash conversion and reported working capital.
Impact: Cash flow and balance sheet presentation
Warehouse and ancillary sites rely heavily on operating leases and related occupancy costs.
Impact: EBITDA comparability and liability recognition
Costco uses estimates for workers' compensation, health, general liability, and other claims.
Impact: Expense accruals and reserve adequacy
Outstanding letters of credit reduce borrowing availability and signal contingent obligations.
Impact: Liquidity analysis and off-balance-sheet risk
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Last updated: 28/09/2026