14 percent over cost (15 percent for Kirkland Signature™
products); providing a money-back guarantee on products
and membership fees; focusing on a narrow selection of
products in a wide range of categories; proceeding with
steady, but cautious, growth; and never selling seconds or
other inferior goods.
1995
Gas stations,
Kirkland Signature
All of these contribute to Costco’s success, comments
Jim Cramer, host of CNBC’s Mad Money. “;ey [Costco]
make it so I want to go,” Cramer tells ;e Connection,
pointing out that he recently walked out of two local
Costcos with a North Face jacket, an oversize ;ashlight for
night ;shing and a complete emergency kit for his car—
none of which were on his shopping list.
1997
Company name
is changed to
Costco Wholesale
COURTESY OF COSTCO WHOLESALE
“Customers come ;rst. Integrity is the cornerstone
upon which we must
build consumer con;dence that
creates customer loyalty.”
Opening day, Maebashi Gunma, Japan, August 2011.
—First tenet in original business manifesto by
Sol Price, founder of Price Club
CONTINUED FROM PAGE 25
1999
Costco.com
is launched
“We learned discipline. We learned to be passionate
about our work,” notes Franz Lazarus of his days at Fed-Mart, Price Club and now Costco, where he serves as
Senior Vice President, Global Operations. “We learned
that you must have high standards of ethics and that there
is no room for shortcuts. And to do the right thing, even
if it’s hard or painful.”
“We always felt we were consumer advocates. It was
the right thing to improve people’s way of life by selling for
as little as we can, not as much as we can. For other retailers, it was the other way around,” adds Rick Libenson.
A;er beginning as a teenager at Fed-Mart and as a top
executive at Price Club, Rick today sits on Costco’s Board
of Directors.
Cramer says success for a company sometimes comes
from things that can’t be precisely measured but still matter. Costco’s policy of paying above-average salaries and
o;ering health insurance to most employees falls in that
category, he says. Unlike traditional retail stores, Costco
has very little turnover among its employees. ;at helps
the stability of a company’s brand. “Jim [Sinegal] knew to
treat people well,” says Cramer. “And if you treat them well,
then a lot of things will ;ow from that.”
It’s all in a name
One morning circa 1990 at Costco’s home o;ce, which
at the time was in Kirkland, Washington, Jim Sinegal and
Phil Lind, then a General Merchandising Manager and
2000
Costco Travel
500
;e camaraderie and respect these team members
had from those earliest days still is evident when you see
them together. ;ere’s never been any doubt that Jim
Sinegal was the man in charge, but the company’s success
has derived from this core group and those they have
brought into the business.
2006
Costco opens
500th warehouse,
La Quinta,
California
“If you’re not spending 90 percent of your time teaching,
you’re not doing your job.”
PHOTOS: COURTESY OF COSTCO WHOLESALE/MEDIA BAKERY/PHOTODISC
—Jim Sinegal
2009
First Costco
in Australia
“I have a sense of accomplishment,” notes Joe Portera,
an Executive Vice President who oversees Costco’s Eastern
Division. “Not individual accomplishment, but for what a
group has accomplished. ;ere has been a cohesiveness, a
group mentality. Everyone here is working together with
one common goal. Jim has instilled that.”
THE FUTURE
;e friendship and respect among the founders still
infuses today’s Costco with a culture that emphasizes fairness. “Most people work here because of the way they are
treated,” notes Dennis Knapp, Senior Vice President overseeing non-foods. “;e culture is very rare. It’s not just
about saying it, it’s about doing it. Jim sets the foundation
we all follow. Everybody in this company gets it.”
Hot dog and a
soda still $1.50
;is shared philosophy is what has led to Costco’s
well-known strategies: keeping markup to no more than
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