Nice piece in the Economist about how Costco’s model of operational simplicity leads to a unique position in modern retail: beloved by customers, investors, AND workers:
- sell fewer things ➡️
- get better prices from suppliers & less inventory needed ➡️
- lower costs for customers ➡️
- more customers & more willing to pay recurring membership fee ➡️
- strong, recurring profits ➡️
- ability to pay well and promote from within 📈💪🏻
Customers are not the only fans of Costco, as the outpouring of affection from Wall Street analysts after Mr Galanti announced his retirement on February 6th made clear. The firm’s share price is 430 times what it was when he took the job nearly four decades ago, compared with 25 times for the s&p 500 index of large companies. It has continued to outperform the market in recent years.
Why Costco is so loved
The Economist