Locator: 49884COSTCO.
With regard to consumers and retail, has something changed in the past several years? COST reminds me a lot of BRK. Something has changed.
One year return.
COST vs BK (Bank of New York):
- one year return
- COST: 0.02% -- that's not 2% -- that's 0.02%;
- BK: 60% return
COST vs WMT:
- one year return
- COST: 0.02% -- that's not 2% -- that's 0.02%;
- BK: 25% return
Costco: for a certain type of customer, Costco is the right type of store. I've had a Costco membership for decades. I seldom visit Costco any more. I doubt I've gone to Costco more than twice in the past year.
Are these the three parameters that drive consumers these days:
- cost
- convenience
- quality
Costco's quality is second to none. Especially beef and wine.
Cost: with Amazon and Walmart, it's more and more difficult to see any real cost savings with Costco. The numbers may be there (savings) but I doubt the average shopper really notices. And to maximize those cost advantages, one needs to buy in bulk. If one has two or three teenage boys to feed, it makes sense, buth otherwise? Costco's big ticket items (computers, for example) provide big savings -- Amazon and Best Buy can often match / beat.
But this is the real problem: convenience. Yes, Costco has on-line delivery but breadth and depth of SKUs pale in comparison to Walmart and especially to Amazon. If one shops in-store, one loses all that convenience: stores are few and far between. We don't go simply because there's only one Costco in town and it's on the other side of town. And when we get there, it's a long walk from the parking lot. Personally I don't care but it is an annoyance.
P/Es:
- COST: 49
- WMT: 40
- AMZN: 35 -- are you kidding me?
After looking at WMT all afternoon it just seems to me that convenience is what Americans favor most. Cost savings at Costco no longer offsets the inconvenience of shopping at Costco. One can argue until the cows come home that Costco has incredible quality, but the "quality" gap between Costco and the others (Amazon, Walmart, etc) is no longer seen by most Americans.
I hope I'm wrong; it would be fascinating to see how Costco turns this around.