Costco heavily pushing Executive Memberships in store?

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babs
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Re: Costco heavily pushing Executive Memberships in store?

Post by babs »

ClownLoach wrote: October 6th, 2022, 1:20 pm
storewanderer wrote: October 5th, 2022, 9:39 pm
HCal wrote: October 5th, 2022, 7:18 pm

How do you know they had a drop in sales? It could easily be an ordering error, or excess inventory that the distribution center needed to get rid off. Even if it was a drop in sales, it may not be due to gas prices. Costco sells a lot of essentials (like food and consumables) that people still have to buy and can't really cut back on, so I wouldn't expect an economic downturn to impact Costco as much as a clothing or electronics store where purchases are more discretionary.


But in any case, California's "inflation relief" checks are going to start rolling in soon, so maybe that will boost sales.
That isn't how Costco typically works; Costco ships items to the warehouses in a manner to get the items in and out quickly. They do not hold backstock for long. There is not much space for them to store a ton of excess inventory at the warehouses (beyond the top shelves) and when you look at the top shelves it is the very very fast moving items stored up there, not random stuff. Though Costco did do an expansion on the Reno location a number of years ago that allowed for a very small "back room" of sorts (it is just a blocked off aisle) and sometimes that space is opened up for customers to shop from. I notice when that space is used for storage it is usually cases of water, pet food bags, and paper products. All those super high velocity type of items that they sell through pallets of each day.
What all these stores had in common was that there were not high velocity items staged in the freezer valley/back endcaps etc. but a complete general variety of goods. All overstock of goods from every department. The high velocity items like the toilet paper and paper towels and water are literally stacked as high as a forklift can physically stack them in the back parking lot. The stores are literally broken with freight because they quite simply have more pallets coming in than going out. They are very, very, very slow. Cashiers standing for minutes at a time waiting for a single customer. Totally dead at rush hour. It was a rather shocking comparison.
I went to two different high volume Costco stores. Both had toilet paper pallets down the frozen aisle. Costco just reported a 10% increase in September sales. Let's stop the false report that sales are down. This influx of inventory maybe due to a push out of inventory than anything else. I bet this is supplier related. There is probably something going on that we're not privey to.
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Re: Costco heavily pushing Executive Memberships in store?

Post by storewanderer »

babs wrote: October 6th, 2022, 9:28 pm
I went to two different high volume Costco stores. Both had toilet paper pallets down the frozen aisle. Costco just reported a 10% increase in September sales. Let's stop the false report that sales are down. This influx of inventory maybe due to a push out of inventory than anything else. I bet this is supplier related. There is probably something going on that we're not privey to.
With as much as prices are up I'm not sure a 10% sales increase represents a volume increase.

Also for the US and excluding fuel comp sales were up 8%. Pretty sure prices are up by more than 8%... compared to last year...

I'm expecting some magic tricks in the next few weeks to plummet gas prices and put everyone in a good mood.

https://www.supermarketnews.com/retail- ... -september
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Re: Costco heavily pushing Executive Memberships in store?

Post by buckguy »

storewanderer wrote: October 6th, 2022, 9:48 pm
babs wrote: October 6th, 2022, 9:28 pm
I went to two different high volume Costco stores. Both had toilet paper pallets down the frozen aisle. Costco just reported a 10% increase in September sales. Let's stop the false report that sales are down. This influx of inventory maybe due to a push out of inventory than anything else. I bet this is supplier related. There is probably something going on that we're not privey to.
With as much as prices are up I'm not sure a 10% sales increase represents a volume increase.

Also for the US and excluding fuel comp sales were up 8%. Pretty sure prices are up by more than 8%... compared to last year...

I'm expecting some magic tricks in the next few weeks to plummet gas prices and put everyone in a good mood.

https://www.supermarketnews.com/retail- ... -september
This is pretty similar to Walmart's last reported quarter which you tried to spin as a win for them. One quarter is never very meaningful by itself. It's the long run that matters. Walmart has stagnated more or less for years and become too dependent on food (low margins) for volume. Costco has had a mix of upward and flat quarters. They've saturated their market in most places and have a limited number of new markets to enter.
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Re: Costco heavily pushing Executive Memberships in store?

Post by ClownLoach »

babs wrote: October 6th, 2022, 9:28 pm
ClownLoach wrote: October 6th, 2022, 1:20 pm
storewanderer wrote: October 5th, 2022, 9:39 pm

That isn't how Costco typically works; Costco ships items to the warehouses in a manner to get the items in and out quickly. They do not hold backstock for long. There is not much space for them to store a ton of excess inventory at the warehouses (beyond the top shelves) and when you look at the top shelves it is the very very fast moving items stored up there, not random stuff. Though Costco did do an expansion on the Reno location a number of years ago that allowed for a very small "back room" of sorts (it is just a blocked off aisle) and sometimes that space is opened up for customers to shop from. I notice when that space is used for storage it is usually cases of water, pet food bags, and paper products. All those super high velocity type of items that they sell through pallets of each day.
What all these stores had in common was that there were not high velocity items staged in the freezer valley/back endcaps etc. but a complete general variety of goods. All overstock of goods from every department. The high velocity items like the toilet paper and paper towels and water are literally stacked as high as a forklift can physically stack them in the back parking lot. The stores are literally broken with freight because they quite simply have more pallets coming in than going out. They are very, very, very slow. Cashiers standing for minutes at a time waiting for a single customer. Totally dead at rush hour. It was a rather shocking comparison.
I went to two different high volume Costco stores. Both had toilet paper pallets down the frozen aisle. Costco just reported a 10% increase in September sales. Let's stop the false report that sales are down. This influx of inventory maybe due to a push out of inventory than anything else. I bet this is supplier related. There is probably something going on that we're not privey to.
I'd argue that they shouldn't have the toilet paper there either. When business is normal for Costco they use those areas for higher profit impulse buys. Right now they should be full of pumpkins and other fall goods. If they have to stage TP there they are hurting their average ticket and profit margins. That is supposed to be a feature space, and a storage space as a last possible resort. I should also mention that furniture this year has been substantially more expensive (many items 40-60% more than comparable ones last year - OR they reduced the size - lots of skinny, short couches that would be uncomfortable for 3 people) - and they are running absolute fire sales to get it all sold to clear space due to the sudden logjam here. Saw a couch that first arrived two weeks ago marked down to $400 from $1099. Costco doesn't liquidate furniture after only a few weeks. Saw chairs I saw before my trip at $250 and $160 respectively marked down to $99 and $85 - again new late September items. No way they're not taking big losses on this furniture that was just setting unless something was off. No major markdowns on this stuff in the PNW and they were doing fine with warehouse space and holidays were set.

I have been stopping at every Costco I can the last few days because I have been looking for fall flower bulbs. The stores in Oregon and Washington I saw last week were all operating normally and had these items featured up front selling briskly. Haven't found any yet in SoCal and three stores told me they knew they had them but they're buried behind other items and they can't find them or get them to the floor. That is not normal Costco behavior as they are typically amazing at keeping tabs on their inventory since they have such a narrow SKU count.

Oregon and Washington stores (Portland, Seattle, and Oregon Coast markets) were slammed last week with customers even in a remote area of Warrington, OR which is a low volume store that services low populated areas in the coastal area but saves them from driving 100+ miles into Portland or points north in Washington. The comparison between Washington, Oregon, and SoCal in a week's time is shockingly different and prior to my PNW trip everything was normal in SoCal.

I was in a store yesterday that was a mess a few days ago but seems to have corrected the freight overflow problem. It's just glaringly obvious that all of these stores suddenly had more pallets coming in than going out through the register, and common sense that at the end of the month when consumers wallets are at their emptiest the gas price skyrocketed causing a greater than expected ripple in the market. Hopefully these promised price drops will materialize today or tomorrow as I've deliberately waited to fill my tank, I normally don't let it get below about a third but waiting for prices to go down... All I saw yesterday were increases over the day before so I would imagine that the gas stations have probably been absorbing a bit of the increase and now that wholesales are supposed to be down they'll keep prices high for some nice profit taking for a few weeks before passing along the savings.
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Re: Costco heavily pushing Executive Memberships in store?

Post by mbz321 »

storewanderer wrote: September 22nd, 2022, 11:18 pm
Those warranty extensions I believe require you to keep that Executive Membership active for the entire warranty period (if you end up claiming the warranty service that is) right? That is a good way to keep people consistently holding Executive.
The warranty has nothing to do with executive memberships, the Gold Star level still gets 2 years on appliances/electronics as well. Although if Costco was smart, they should make that an Executive perk or do something to make executive a bit more enticing.
I wonder if there is a good way to quantify how much they are losing with "shared memberships" at self checkout. They should do some tests on that. Basically require verification of photo on the card at a location or two's self checkouts for an entire day and see how much membership sharing takes place and also pay attention to how many carts get abandoned when the customer notices someone is checking the photo on the card because I think those abandons could safely be assumed as membership share attempts.
Hell, a lot of members cards don't have a picture at all on them, and yes, card sharing happens at the regular checkouts as well and people definitely get by us, but the cashier adds another layer of verification. Technically we can ask for ID, but generally don't unless the order seems exceptionally large/suspicious or full of electronics or such. There was a period during Covid when we weren't putting pictures on cards, at least in my location, which was a huge mistake.
My location does have a color printer now at Membership so new cards have a much improved picture, although the printer constantly breaks down :\

Also the consistent upgrade push is just causing members to utilize the self checkout as they generally aren't hassled over there (maybe that's a goal? :lol:) Very often there will be a line stretched back for self-checkout while the regular lines have very few people in them.
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Re: Costco heavily pushing Executive Memberships in store?

Post by storewanderer »

buckguy wrote: October 7th, 2022, 7:09 am


This is pretty similar to Walmart's last reported quarter which you tried to spin as a win for them. One quarter is never very meaningful by itself. It's the long run that matters. Walmart has stagnated more or less for years and become too dependent on food (low margins) for volume. Costco has had a mix of upward and flat quarters. They've saturated their market in most places and have a limited number of new markets to enter.
Those were fantastic results for Wal Mart, especially compared to Target.

Costco isn't at the same level as Wal Mart when you look at growth and performance. It typically delivers much stronger results.

So as you point out Costco results aren't much different than Wal Mart. That shows Wal Mart is gaining serious ground and Costco is at best treading water. And Target is sinking. Good riddance to Target. I don't necessarily expect the momentum to continue at Wal Mart but it is amazing how well their numbers are.
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