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Costco Wholesale Corporation (NASDAQ: COST), based in Issaquah, Washington state, has transformed into one of the largest retailers globally despite being relatively young. The company’s unique membership-based business model allows it to offer goods at lower prices due to bulk purchases. This strategy quickly gained popularity, evident by its rapidly expanding customer base despite having only 874 stores worldwide as of now. In this article, we will take a closer look at the history and growth trajectory of Costco Wholesale Corporation (NASDAQ: COST).
Costco’s story begins with Price Club, founded by retailer Sol Price in San Diego, California back in 1976 as a membership-based discount store for small businesses. Jim Sinegal worked his way up from being a grocery bagger at FedMart (Price Company’s predecessor) to executive vice president of the same company during the late seventies and early eighties before joining forces with Jeff Brotman, also an accomplished retailer, in launching Costco’s first store in Seattle on September 15, 1983.
Initially catered solely to small businesses like its parent organization (Price Company), expanding into membership openness for ordinary people resulted in faster global expansion. By the end of that year, they had opened two more locations – one each in Portland and Spokane. Sinegal’s unconventional approach to operations prioritized customer satisfaction over shareholders’ bottom lines, which became a hallmark of Costco as an organization. The company has always maintained this philosophy while also emphasizing the optimization of its work environment by offering fair wages and top-notch benefits for employees – resulting in high staff retention rates that contribute to the overall success story of the corporation.
Costco went public in 1985, with over $300 million added through revenue increases after acquiring nine further shops just months into this initial year as a publicly traded company. By the end of its fiscal year for ’85, Costco had already amassed an impressive membership base of around 115,000 – up from roughly 38,000 in the previous calendar year alone! This tremendous growth is still well underway today, and as reported during November last (2021), over $7.9 billion had been generated through sales for that month alone while boasting a staggering membership base of around 129 million people worldwide – an increase from its previously recorded figure in the same period two years ago!
In September 1986, Costco acquired a controlling interest (50%) in Price Club. Following this merger, they formed ‘PriceCostco’, which subsequently assumed ownership of roughly two hundred retail shops around the U.S., and as we speak, these remain open for business under their familiar moniker – ‘Costco’.
In 1987 alone, Costco had grown from zero to $3 billion in sales over a period spanning just five years! This impressive feat is unmatched by any other company before or since. The corporation’s remarkable expansion can be attributed primarily due to the merger with Price Club that led to its rapid growth into one of America’s largest retail chains for wholesale goods and services, surpassing Sam’s Club (Walmart-owned) in this regard by 1987!
Costco currently employs over three hundred thousand people worldwide while ranking eleventh on the Fortune 500 list with regards to yearly total revenues as per estimates calculated until fiscal quarter closing dates for November last (2021). The company’s market capitalization is also in excess of $320 billion.
In conclusion, Costco Wholesale Corporation’s growth story is one that should be celebrated by business analysts and investors alike due to its unique approach towards customer satisfaction while maintaining a healthy work environment for employees – which has resulted in high staff retention rates contributing significantly to the overall success of this corporation over time. The company’s membership-based model, paired with smart strategies around operations & supply chains have propelled Costco Wholesale Corporation into one of America’s most successful retailers globally today!
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