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THIS MONTH COSTCO opens its 500th
warehouse, in La Quinta, California, near Palm
Springs. To those who have been with the company since it opened its first warehouse on
September 15, 1983, in a commercial district of
Seattle, this milestone is astonishing. Back
then, membership warehouse clubs were a new
concept, as was the idea of a no-frills, bare-bones retail environment.
From the beginning, Costco founders
Jim Sinegal and Jeffrey Brotman believed that
if they offered successful brand-name products at the lowest possible prices, and if they
treated suppliers and employees well, with
lots of hard work their business could suc-
ceed. But they had no idea that Costco would
eventually have nearly 50 million members,
with operations across the United States,
Canada and Mexico, and overseas in the UK,
Korea, Taiwan and Japan.
Costco owes part of its heritage to the
Price Club, a membership warehouse chain
that opened its first store in San Diego in 1976.
In 1993, Costco and the Price Club merged,
operating as Price/Costco until 1997, when the
company changed its name back to Costco.
“The business has become significantly
more complicated over the years,” says
Costco President and CEO Jim Sinegal. “We
had no pharmacies, optical centers, gas sta-
This architectural sketch of Costco’s
500th warehouse, which will open late
this month in La Quinta, California, portrays a landmark achievement for Costco.
tions, fresh meat or produce. We took cash or
checks only. We didn’t even have hot dogs the
first year.”
But Sinegal says that, despite Costco’s
many changes, most of the company’s original core operating concepts remain intact.
No big festivities are planned for the 500th
warehouse opening. It’s business as usual at
La Quinta: offering members great products
at the best prices possible.—Will Fifield
PHO TOS: MCWHINNE Y PHO TOGRAPH Y
NOT TOO LONG AGO, organic products represented a specialty niche, available mainly in select health-food stores.
There were relatively few products, they
were expensive and quality wasn’t always
top-notch.
That’s all dramatically changing.
Organic products have skyrocketed in
popularity and are becoming widely available as consumers are buying foods that
are raised using natural methods.
Many organic products are available at
Costco, and that number will increase in
the coming years. To find out about exciting new organic products—and the companies behind them—Costco and
Anderson Daymon Worldwide, a Costco
broker, recently hosted the All Natural &
Organic Symposium at Costco’s home
office in Issaquah, Washington.
In the symposium, 58 companies were
invited to display their organic products to
Costco’s regional food buyers. It was a
chance for buyers to see new products,
exchange ideas with
business owners
and possibly find
new products that
would be a good fit in
Costco warehouses. Products on display
included juices and energy drinks, meat and
poultry, baked goods, beer and wine, and
even nonfood items such as charcoal.
“It was a chance for Costco to meet with
innovators in the organics field, with the idea
to increase the number of organic products
in our warehouses to meet members’ demands—at the lowest possible price,”
explains Gary Kotzen, a Costco vice president
in the foods department.
Many of the participating companies
aren’t big enough to meet the demand of
Costco nationwide. However, they could supply products to a particular region. “And
some of these small companies end up being
larger companies,” points out Gary. “The
seeds that were planted at this meeting will
help the industry grow.”—Tim Talevich
Costco buyers had a chance to sip and
sample a wide variety of organic foods
at a recent symposium at company
headquarters in Issaquah, Washington.
