Monday, February 19, 2007

Costco: I am a Fan

I have not shopped at local malls in years. I find them depressing and inefficient. I particularly dislike department stores, where items are clustered by brand and I am forced wander all over the store to see what the actual choices are. Likewise I prefer my local food co-op to a large supermarket where in order to choose an item, I am subjected to dozens or even hundreds of choices. Too much!

I have fallen in love with Costco. I go about once every 3 months and actually look forward to it. I appreciate that there is so little hype. In each category there is one choice which its buyers have carefully vetted, and if it's what I need, I buy it. I like letting Costco do the research. Barry Schwartz writes about "the paradox of choice": our society's superabundance actually decreases people's happiness. Too much choice make us anxious. Costco solves this problem for me. When I was shopping for a digital camera, I just put it on my Costco shopping list - no Schwartzing out about it! (Thanks to N and S for that new verb.) I just picked their cheapest digital camera, stashed it in my cart, and didn't have to think about it again. Yay! I have zero interest in researching digital cameras.

I get a kick out of the Costco's immense variety of types of merchandise. Instead of 100 kinds of junk cereal, it carries 100's of different types of items. Where else can you buy a computer, camisoles, canned tomatoes, car tires, cfls, and cannoli all in the same shopping trip? Costco is far from my home, so what usually occasions a trip is my hosting a reception or other gathering. I can do a lunch for 50 people for $100.

Costco is clever about consistency vs variety. You just never know what new items they'll be featuring, and they cater to an middle to upscale audience. (About 25% of their stock is always changing.) I find myself impulse gift buying there, because the items are high quality and reasonably priced. Last time I found their version of The Rabbit, a cool cork screw. I threw that in the wagon along with the lunch for 50 and the digital camera, and sure enough within a few weeks, it was the perfect birthday gift for my brother. I read Consumer Reports and have been impressed with how often Kirkland, the Costco housebrand, is objectively rated a Best Buy. My 23 year old son tells everyone about his favorite store for buying work slacks: Costco!

When I could see I was in love, I did my due diligence. (I started out at Sams Club, but dumped them when I learned more about Walmart's labor practices.) Costco's labor practices are superior in the industry. They pay about double of their competitors, have some union labor, and boast very low turnover. The CEO Jim Sinegal earns $555,ooo annually and is philosophically committed to fair practices. Of course there are some negatives, such as its large eco-footprint parking lots, suburban sprawl locations, and lack of much locally grown food. And there is a temptation to over-consume because of the low prices. So one must be judicious when shopping, and remember to bring a blank check, since they don't take credit cards. * You generally have no idea how much you're going to spend, since it's a combination clothing/office/grocery/hardware/furniture store and electronics store.

You may have figured out where this post was going. I recently purchased stock in Costco. I figure a store that has me excited about coming back, and can simultaneously earn my son's loyalty with their men's apparel, has a great formula. It's already up 10%! Long live Costco!

* My savvy son has just decided to go for the Costco American Express Cash-Back, No Fee credit card. Sounds like a good deal. For one thing, you can use it at Costco.

1 comment:

Alexander said...

Great post! Never heard of Costco though, but i'll sure visit if I ever come to the states!