Big box stores are dying.
JCPenney, Sears, Best Buy, and more are shuttering stores and recasting their strategies.
“They were hit by a perfect storm of competition from the Internet and supermarkets,” Steve Brazier, CEO of market research firm Canalys, said in a report last year.
Even mighty Walmart, once indispensable, recently admitted that sales were suffering.
Yet Costco has remained strong throughout the recession. The company has continued to grow and see sales increase.
Costco's founder Jim Sinegal credits the company's unusual business strategy with its success.
Sinegal, whose company has been called the "anti-Walmart," invests in employees and limits the items he sells.
Costco sells a limited number of items.
Despite Costco's large store volume, it only sells four toothpaste brands. Walmart sells 60. Selling fewer items increases sales volume and helps drive discounts.
Costco relies on customers purchasing high volumes.
People go to Costco to buy in bulk. Buying large amounts of products helps keep costs down for Costco.
Costco has customers pay for memberships.
Costco shoppers pay in order to buy merchandise at the store. This up-front investment increases the likelihood that customers will return and be loyal to Costco.
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