Who are the Main competitors of Costco?
Costco is one of the largest retail brands in the US operating a large chain of membership warehouses in the US as well as some other nations including UK, Canada, Mexico, Spain, Japan and Australia. In 2016, it entered two new markets including France and Iceland and opened its first warehouses there. The total number of Costco warehouses in 2018 had reached 749. Its total revenue in 2017 was 129 Billion dollars and that from the US market was 93.9 Billion dollars. Costco’s strong business model and competitive edge make it a very tough contender for Walmart and other major retail brands in the US retail industry.
Its Kirkland Signature is well known for its quality and has continued to gain popularity. Costco offers its members a large range of products and its level of popularity can also be understood from the fact that the brand does not invest much in advertising or marketing. While its international presence may be limited compared to Walmart, it has still managed a strong presence in the US and Mexico. This is a discussion of its major competitors. Let’s have look at some stats related to Costco before moving on to its competitors.
Costco Important Stats:
Revenue 2017: 129 Billion US Dollars.
US Revenue 2017: 93.89 Billion USD.
Net Income 2017: 2.68 Billion USD.
Number of warehouses in 2018: 749
Number of employees: 231000
Walmart, apart from being the biggest retail brand in the US is also the biggest competitor of Costco. While the retail industry was undergoing a challenging situation, Walmart continued to perform well financially and expanded fast internationally. In order to enter the Indian market and grow its presence there, the brand bought a major stake in the Indian e-commerce brand Flipkart. Its revenue in 2018 grew to 500.3 Billion US dollars. Its net sales grew to 495.76 Billion US dollars. Walmart’s Sam’s Club is also quite popular and has a strong presence in the US. Overall, Walmart is the toughest rival of Costco, leading the US retail market.
The Kroger Company:
The Kroger company is headquartered in Cincinnati, Ohio. It is one of the largest food retailers in the world with fiscal 2016 sales of 115.3 Billion dollars. In 2017 it achieved net sales of 122.7 Billion dollars. It had 782 convenience stores operational under 6 banners in 9 states and the brand also had 2782 Supermarkets and Multi Department stores. It has 42 distribution centers for a well-managed supply chain. Kroger covers 35 states as well as the District of Columbia (data 2017).
Based on its 2017 Net sales, Home Depot is the largest home improvement company in the world. The brand offers a very large assortment of home improvement products as well as building materials, lawn and garden products, and home decor products. Apart from these, it provides Home improvement products and services. By the end of 2017, Home Depot had 2284 Stores in US. In 2017, its sales grew 6.7 % to 100.9 Billion dollars. The brand’s financial results for 2017 were quite appreciable. Since, Costco also sells a large range of home improvement products, Home Depot is one of its significant competitors with an impressive presence all over US.
Walgreens Boots Alliance:
Apart from health and Wellness products, the Walgreens Boots Alliance brand also sells beauty products including lifestyle products and toiletries. It had 8100 retail stores operational as of August 31, 2017 in its US pharmacy retail division. Apart from them, its retail pharmacy international division also operated 4722 stores. The brand achieved sales of 118 Billion USD in 2017 and a Gross profit of $29 Billion.
Target is also a major retail player in the US market offering a wide assortment of general merchandise and food products. In 2016, it achieved net sales of 69.5 Billion Dollars. While the total net sales had declined at Target in 2016, it was still a significant year for the retail brand. Target is undergoing a transition to a new operating model. During this period, its signature categories including Style and Kids gained market share. Over the last two years, its digital channel sales also achieved impressive growth. The retail industry is evolving fast and Target has performed in a challenging environment which shows it is a strong competitor for Costco in the US retail market.
Amazon is the biggest brand in the world of E-commerce. It has seen rapid growth during recent years. Apart from that, it has also managed to grab an impressive share in the entire retail industry. While Walmart is continuing to grow its presence and even investing in E-commerce, Amazon’s fast growth has brought it into the list of one of the most significant competitors for US retailers.
Lowe’s is the world’s second-largest home improvement retailer. As of February 2, 2018, it operated 2,152 home improvement and hardware stores. Lowe’s offers a large range of home improvement products in several categories. A large range of merchandise offered by Lowe’s is also available at Walmart and Home Depot. In 2018, February, it had 310,000 employees of which 200,000 were full-time and 110,000 part-time. Its 2017 revenue was 68.6 Billion dollars around 3.6 Billion USD higher than 2016.
Best Buy is also a major player in the US retail industry. At the end of fiscal 2018, Best Buy had 1200 large and 300 small-format stores. The number of employees was at 125000 including full time and part-time. The brand showed strong financial performance in the year 2017 when its total revenue went up by 7% as compared to 2016 reaching 42.2 Billion Dollars. Best Buy is also one of the significant competitors of Costco.
The other competitors of Costco include Macy’s, Kohl’s, Dollar General, Dollar Tree, and several other big and small retailers in the United States. However, Costco has a strong competitive edge and its focus on digital technology has helped it grow its revenue from e-commerce channels. Apart from that, the company enjoys a strong membership retention rate. Costco’s focus on product quality and customer service has helped the company grow its competitive strength and customer loyalty.
Annual Reports of the discussed brands