Costco chic

I finally crawled out from under the rock I was hiding and visited my first Costco last week, albeit in Veracruz, Mexico.  Their business model seems to focus on stocking only profitable items that can be bought and stored in bulk.  They do not relish the idea of the loss leader or the cross subsidy, but instead they evaluate items in stand-alone terms and look for high turnover.  Inventory costs are low because what they have is right there in the store on pallets.  They don’t seem to stock much in the way of competing brands and you see "Kirkland" — their house label — frequently; presumably buying from a single vendor lowers their costs further.  As for the store I visited, two thirds of the stuff was hard to find and half of it was hard to reach.  There was a surfeit of cranberry juice, which is otherwise uncommon in Mexico.  There was lots of U.S. Grade A beef and canned goods.  No one asked me to become a member.  It would be a good place to stock up for a party but I can’t imagine shopping there regularly: too many of my favorite items are missing and they don’t have the hardcore best of Mexican foodstuffs, which are found in the traditional markets.  Since they have over thirty stores in Mexico perhaps the formula is working.

Here is an NYT article about the U.S. phenomenon of Costco chic.


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