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7 Amazing Ways Costco Boosts the Consumer Economy

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Wise Marketer Staff

Posted on May 31, 2024

Recognizing the contributions of Costco’s Longtime, Retiring Leaders

In March, Costco’s chief financial officer, Richard Galanti, retired, joining CEO Craig Jelinek in the golden pasture. These seven economic indicators are a tribute to their financial prowess.

By Jenn McMillen

If you buy stock in Costco, then you’re basically buying stock in chickens, gold, and hotdogs. And you have two legendary retail leaders to thank for this winning mix. This year, these legends are closing a chapter.

In March, Richard Galanti, Costco’s chief financial officer since 1985, retired, following CEO Craig Jelinek stepping down in January after 39 years at the company (12 at the helm). Anyone who’s invested in the company has invested in this team, as well.

In the years since Jelinek and Galanti joined Costco, the retailer has expanded from a single warehouse location to an international powerhouse with nearly 875 warehouses, including locations in Iceland and Korea. In fiscal 2023, its revenue exceeded $237 billion and shares in Costco pierced the $700 mark in 2024.

Those who invest in Costco aren’t just stock traders, however, they’re also members. And Costco now counts more than 73 million of them, an 8% increase as of the second fiscal quarter over the same period in 2023. Fee income from these memberships generates more than $1.1 billion annually.

Costco’s Winning Mix: Low-Price and High-Interest Goods

Many consumers are willing to pay Costco’s annual membership fee of $60 or $120 (premium) because these fees can quickly pay for themselves. Many of Costco’s low prices have remained famously unchanged for decades. Members and investors can thank the Jelinek-Galanti team for this.

Costco’s intriguing mix of merchandise, from recently introduced gold bars to home saunas, has also proven enticing. Members and investors can thank the leadership team for this, as well. Here’s why some of the company’s hottest categories serve as key economic indicators.

Gold bars. Yup, Costco began selling 24-karat gold bars in August 2023. Now, analysts at Wells Fargo expect revenue from the bullion to generate $100 million to $200 million monthly, CNBC reports. Costco has not released their purchase price of the 1-ounce bars, but it’s believed they sell at roughly 2% above market price – approximately $2,400 in mid-April. Costco either spotted an opportunity or it’s creating a gold rush, because gold prices have risen by more than 13% in 2024. Still, gold is not necessarily a profitable category for Costco. That 2% margin is slim, and Costco gives its executive members 2% cash back on purchases. However, selling gold can be a solid membership recruitment tool.

Rotisserie chickens. Annually, Costco sells nearly 12% of all the rotisserie chickens Americans buy – that’s an estimated 109 million of the 900 million slow-cooked birds each year, The Hustle reports. Costco introduced the chickens in 2000 for $4.99, and they remain at $4.99 despite pecking at profits. In 2023, Galanti described the price strategy as “an investment in low prices to drive membership – to drive the sales in a big way.” Indeed, in 2015, Galanti said Costco was comfortable losing $30 million to $40 million in annual profit in return for keeping the rotisserie price at $4.99. Elsewhere, most rotisserie chickens cost $6 to $10, according to Vox.

Dogs and drinks. A typical Costco warehouse covers 146,000 square feet, which can take a lot of time to shop, so you might want to pack a lunch. Or get a dog at the door. Costco has been selling its conveniently located hot dog-drink combo for just $1.50 since it introduced the menu staple in 1985. The price is still $1.50, and Costco customers are still biting: In 2023, Costco sold nearly 200 million of the combos, according to Mashed. That compares with 156 million in 2022. By comparison, a McDonald’s classic hamburger averages $2.19. Galanti once promised to keep the price frozen “forever.”

Kirkland Toilet Paper. The average Costco shopper spends about $150 per trip;  for many of them, part of that $150 is earmarked for toilet paper. Costco sells more than a billion rolls of its private label Kirkland Signature Bath Tissue annually, generating an estimated $400 million in revenue, the Motley Fool has reported. Once again, value is driving demand: at less than $24 for a 30-roll pack online, the tissue is less expensive per sheet (an estimated 20 cents for every 100) than most other brands and is said to be as soft and absorbent. Further, Costco prices are typically less in the store than online, Motley Fool reports, so the price of Kirkland TP is likely lower in the store, as well.

Kirkland Signature Bacon. In 2013, Consumer Reports rated Costco's Kirkland-brand bacon No. 1 in a taste test, calling it the “only excellent product” among all brands tested and placing it before competitors such as Oscar Meyer. Kirkland-brand bacon also sells for much less than competing brands – close to $3.87 a pound (in 2023), compared with an average per-pound price in the U.S. of $6.59. That’s a 70% difference. The low price does require a four-pound commitment, at $15.49, but members apparently have the bellies for it – in 2023, bacon ranked as Costco’s third most popular product, according to Zippia.

GLP-1 weight-loss drugs. At the risk of reducing those bacon sales, Costco offers its members a lower-cost option for GLP-1 weight-loss prescriptions such as Ozempic and Wegovy. While these diabetes drugs typically cost north of $1,000 per month when used for weight loss, Costco’s program, CostcoWeightLoss.com, runs just $179 for three months. The offering is new – introduced in April – but it will serve as an economic indicator if the forecasts for GLP-1 drug use are accurate. By 2030, nearly 30 million people could be taking s Ozempic, Mounjaro, Wegovy, and other weight-loss prescriptions, according to J.P. Morgan Research.

All the “holy cow” stuff. A trip to Costco is often filled with unexpected items and best-kept secrets, which take the shapes of saunas, saxophones, vending machines and a shed big enough to store an SUV. Granted, many of these items are only available at Costco.com, but having them there serves the same clever purpose as gold bars, GLP-1 drugs, and $1.50 dog combos: they entice consumers to slap down $60 (or $120) to become Costco members.

Costco’s Most Important Economic Indicator: Its Members

In 2024, investors will be closely watching Costco’s new leadership team: Ron Vachris, who took over as CEO in January, and Gary Millerchip, CFO. New chapters will open, and they could be good ones. Vachris, Costco’s former chief operating officer, is a 40-year veteran who started as a Costco forklift driver. Millerchip, who joins Costco from the Kroger Co., will be groomed under Galanti through January 2025.

Here’s one way of knowing if those future chapters will be good by 2025 when Galanti fully retires: The cost of gold bars will continue to rise while the prices of Costco’s rotisserie chickens and hot dogs stay put.


This article originally appeared in Forbes.

Forbes.com retail contributor Jenn McMillen is nationally renowned as the architect of GameStop’s PowerUp Rewards, and is Founder and Chief Accelerant of Incendio, a firm that builds and fixes marketing, consumer engagement, loyalty and CRM programs. Incendio provides a nimble, flexible, and technology-agnostic approach without the big-agency cost structure and is a trusted partner of some of the biggest brands in the U.S.