Costco (COST)
Runs low-price membership warehouses built on limited selection, rapid turnover, and annual fees.
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Costco is a paid-membership warehouse chain built around selling a deliberately small selection in very large volumes at thin markups. Everyday groceries bring people back, while annual fees supply unusually dependable economics. The next layer is more warehouses and faster digital shopping, but the model still hangs on members believing the savings are worth renewing.
Item facts: FY2025 · year ended Aug 31, 2025, from filings, earnings calls and company pages.
Judgment weights, not filed revenue
The band summarizes business focus and direction. ~ marks estimates.
8 in detail · 14 more below
Foods and Sundries
Dry groceries, drinks, freezer goods and household basics brought in $109.56B in FY2025. They are Costco's largest business and the repeat-purchase engine; FY2026 Q2 growth was 8.1%.
Competes with Grocery and Consumables (Sam's Club/Walmart) · Grocery, Perishables and Sundries (BJ's Wholesale Club)
In plain English
This is the weekly cart: cereal, drinks, freezer packs, candy and everyday household supplies, sold in a deliberately small range of choices and unusually large packs. It is Costco's biggest sales stream because people run out and return.
Costco buys huge quantities, moves them quickly through depots and warehouses, and adds only a thin markup. Members get a low price; Costco gets frequent visits that also put less routine purchases in the cart. The watchpoint is simple: supply and freight costs can squeeze an already narrow spread between buying and selling prices.
Kirkland Signature
Costco's own label spans food, household goods and more, with FY2025 sales near $90B. It is usually priced at least 15–20% below comparable national brands and generally earns Costco more per sale.
Competes with Member's Mark (Sam's Club/Walmart) · Wellsley Farms and Berkley Jensen (BJ's Wholesale Club)
In plain English
A single house name appears on everything from groceries to household goods, giving Costco a product it controls across much of the store. Kirkland Signature is not extra revenue on top of those aisles; it is the portion sold under Costco's own label.
Costco hires makers or uses its own manufacturing arm, then sells the result only through Costco. The deal resembles a restaurant's house dish: the seller controls the recipe, price and presentation. Members keep buying when quality feels comparable to a famous label for less, making trust the real asset—and a quality failure the risk that can spill across categories.
Non-Foods
Appliances, electronics, apparel, furniture and other occasional buys generated $71.19B in FY2025. Sales grew 9.3% in FY2026 Q2, but fashion, product cycles and tariffs make this aisle harder to predict than groceries.
Competes with General Merchandise (Sam's Club/Walmart) · Hardlines, Home, and Apparel (Target) · Online Stores (Amazon)
In plain English
Walk beyond the food pallets and the mix turns into televisions, appliances, clothes, tools, furniture, jewelry and seasonal surprises. These purchases happen less often than grocery runs, but one large item can make a much bigger receipt.
Costco chooses a narrow set, orders at scale and rotates it quickly—more treasure hunt than endless catalog. Warehouses, home delivery and suppliers shipping straight to buyers all complete the sale. The money depends on picking the right products at the right moment; a missed trend or a tariff can leave goods needing a markdown.
Gasoline
Member-priced fuel produced roughly $27.0B in FY2025 sales. It earns little on each gallon but gives drivers another reason to visit; prices pulled sales down that year even as volume grew.
Competes with Fuel (Sam's Club/Walmart) · Gas (BJ's Wholesale Club)
In plain English
The pumps outside are a useful bargain bolted onto the membership. Drivers fill up at a low price, and the trip can continue through the warehouse doors.
Costco buys fuel, sells enormous volumes through its on-site stations and accepts a slim amount on each gallon. In FY2025, falling pump prices more than erased higher volume, showing why sales dollars can shrink even when more fuel is sold. Its job is less about rich earnings at the pump than reinforcing the value of renewing and keeping warehouse traffic moving.
Warehouse Ancillary and Other Businesses (excluding Gasoline)
Pharmacy, optical, food court, hearing aids, tire installation, travel and other services together produced roughly $24.18B in FY2025. Pharmacy has recently been the strongest piece, but Costco does not reveal each service's sales.
Competes with Health and Wellness (Sam's Club/Walmart) · Health and Wellness (Walmart) · Pharmacy (CVS Health)
In plain English
Around the main aisles sits a ring of practical errands: fill a prescription, buy glasses, fit hearing aids, install tires, eat a quick meal or book a trip. Costco does not reveal how much each counter contributes, so the honest view is the bundle.
Some services sell products directly; others connect a member with a partner. Together they make one membership useful on more days and for more jobs, like adding rooms to the same clubhouse. Pharmacy has recently been the strongest piece, while licenses, staffing and partner capacity determine how quickly the bundle can grow.
E-commerce and Digitally Enabled Sales
Digitally started purchases were about $26.99B in FY2025 and grew 20.7% in FY2026. They include orders completed through warehouses, distribution sites and Travel; the watchpoint is that online orders generally earn less than warehouse trips.
Competes with E-commerce, pickup, and Scan & Go (Sam's Club/Walmart) · Online Stores and Prime (Amazon)
In plain English
Costco's shelves can now start on a screen. Members order for delivery or pickup, arrange travel, or discover products online; the goods may still come from a warehouse, a distribution site or a supplier.
About ten cents of each FY2025 merchandise-sales dollar began digitally, including purchases completed through several Costco routes. Faster growth makes this the expanding front door, while carriers, delivery partners and extra handling take a larger bite from each order than an in-person warehouse sale.
Fresh Foods
Meat, produce, deli and bakery generated $37.99B in FY2025. This was the fastest-growing merchandise group in FY2026 Q2 at 11.9%; keeping prices sharp can lift traffic while trimming what Costco keeps per sale.
Competes with Fresh, Freezer and Cooler (Sam's Club/Walmart) · Perishables (BJ's Wholesale Club)
In plain English
Meat counters, produce crates, deli trays and bakery racks turn the warehouse into a place for tonight's dinner, not just long-life bulk goods. Fresh food spoils, so speed matters all the way from supplier to checkout.
Households and small businesses buy repeatedly, giving Costco traffic and a large sales stream. Growers and processors supply the goods; refrigerated depots and warehouse preparation keep them usable. The balancing act is like running a relay against a clock: low prices can bring more shoppers, but waste, cold-storage failures or extra price cuts can quickly consume the gain.
Memberships
Annual access fees brought in $5.32B in FY2025—small beside merchandise sales, but equal to 51.3% of Costco's profit from running its stores and services. Worldwide renewal eased to 92.2% by FY2026 Q3, making perceived savings the key watchpoint.
Competes with Club and Plus (Sam's Club/Walmart) · Club and Club+ (BJ's Wholesale Club) · Prime (Amazon)
In plain English
The small annual payment unlocks nearly everything else. Gold Star and Business members pay the base price; Executive members pay twice as much and receive two cents back for each eligible dollar spent, up to a yearly limit.
Fees arrive before a year of access is delivered, giving Costco dependable cash while members do the shopping that creates merchandise sales. The fee pool is tiny next to the checkout total but enormous beside what remains after Costco pays its operating costs. Renewal is the pulse: if members stop seeing enough savings and useful services, both fee income and store traffic weaken.
Foods and SundriesDry groceries, drinks, freezer goods and household basics brought in $109.56B in FY2025. They are Costco's largest business and the repeat-purchase engine; FY2026 Q2 growth was 8.1%.Dry groceries, drinks, freezer goods and household basics brought in $109.56B in FY2025. They are Costco's largest business and the repeat-purchase engine; FY2026 Q2 growth was 8.1%.
In plain English
This is the weekly cart: cereal, drinks, freezer packs, candy and everyday household supplies, sold in a deliberately small range of choices and unusually large packs. It is Costco's biggest sales stream because people run out and return.
Costco buys huge quantities, moves them quickly through depots and warehouses, and adds only a thin markup. Members get a low price; Costco gets frequent visits that also put less routine purchases in the cart. The watchpoint is simple: supply and freight costs can squeeze an already narrow spread between buying and selling prices.
Competes with Grocery and Consumables (Sam's Club/Walmart) · Grocery, Perishables and Sundries (BJ's Wholesale Club)
Kirkland SignatureCostco's own label spans food, household goods and more, with FY2025 sales near $90B. It is usually priced at least 15–20% below comparable national brands and generally earns Costco more per sale.Costco's own label spans food, household goods and more, with FY2025 sales near $90B. It is usually priced at least 15–20% below comparable national brands and generally earns Costco more per sale.
In plain English
A single house name appears on everything from groceries to household goods, giving Costco a product it controls across much of the store. Kirkland Signature is not extra revenue on top of those aisles; it is the portion sold under Costco's own label.
Costco hires makers or uses its own manufacturing arm, then sells the result only through Costco. The deal resembles a restaurant's house dish: the seller controls the recipe, price and presentation. Members keep buying when quality feels comparable to a famous label for less, making trust the real asset—and a quality failure the risk that can spill across categories.
Competes with Member's Mark (Sam's Club/Walmart) · Wellsley Farms and Berkley Jensen (BJ's Wholesale Club)
Non-FoodsAppliances, electronics, apparel, furniture and other occasional buys generated $71.19B in FY2025. Sales grew 9.3% in FY2026 Q2, but fashion, product cycles and tariffs make this aisle harder to predict than groceries.Appliances, electronics, apparel, furniture and other occasional buys generated $71.19B in FY2025. Sales grew 9.3% in FY2026 Q2, but fashion, product cycles and tariffs make this aisle harder to predict than groceries.
In plain English
Walk beyond the food pallets and the mix turns into televisions, appliances, clothes, tools, furniture, jewelry and seasonal surprises. These purchases happen less often than grocery runs, but one large item can make a much bigger receipt.
Costco chooses a narrow set, orders at scale and rotates it quickly—more treasure hunt than endless catalog. Warehouses, home delivery and suppliers shipping straight to buyers all complete the sale. The money depends on picking the right products at the right moment; a missed trend or a tariff can leave goods needing a markdown.
Competes with General Merchandise (Sam's Club/Walmart) · Hardlines, Home, and Apparel (Target) · Online Stores (Amazon)
GasolineMember-priced fuel produced roughly $27.0B in FY2025 sales. It earns little on each gallon but gives drivers another reason to visit; prices pulled sales down that year even as volume grew.Member-priced fuel produced roughly $27.0B in FY2025 sales. It earns little on each gallon but gives drivers another reason to visit; prices pulled sales down that year even as volume grew.
In plain English
The pumps outside are a useful bargain bolted onto the membership. Drivers fill up at a low price, and the trip can continue through the warehouse doors.
Costco buys fuel, sells enormous volumes through its on-site stations and accepts a slim amount on each gallon. In FY2025, falling pump prices more than erased higher volume, showing why sales dollars can shrink even when more fuel is sold. Its job is less about rich earnings at the pump than reinforcing the value of renewing and keeping warehouse traffic moving.
Competes with Fuel (Sam's Club/Walmart) · Gas (BJ's Wholesale Club)
Warehouse Ancillary and Other Businesses (excluding Gasoline)Pharmacy, optical, food court, hearing aids, tire installation, travel and other services together produced roughly $24.18B in FY2025. Pharmacy has recently been the strongest piece, but Costco does not reveal each service's sales.Pharmacy, optical, food court, hearing aids, tire installation, travel and other services together produced roughly $24.18B in FY2025. Pharmacy has recently been the strongest piece, but Costco does not reveal each service's sales.
In plain English
Around the main aisles sits a ring of practical errands: fill a prescription, buy glasses, fit hearing aids, install tires, eat a quick meal or book a trip. Costco does not reveal how much each counter contributes, so the honest view is the bundle.
Some services sell products directly; others connect a member with a partner. Together they make one membership useful on more days and for more jobs, like adding rooms to the same clubhouse. Pharmacy has recently been the strongest piece, while licenses, staffing and partner capacity determine how quickly the bundle can grow.
Competes with Health and Wellness (Sam's Club/Walmart) · Health and Wellness (Walmart) · Pharmacy (CVS Health)
E-commerce and Digitally Enabled SalesDigitally started purchases were about $26.99B in FY2025 and grew 20.7% in FY2026. They include orders completed through warehouses, distribution sites and Travel; the watchpoint is that online orders generally earn less than warehouse trips.Digitally started purchases were about $26.99B in FY2025 and grew 20.7% in FY2026. They include orders completed through warehouses, distribution sites and Travel; the watchpoint is that online orders generally earn less than warehouse trips.
In plain English
Costco's shelves can now start on a screen. Members order for delivery or pickup, arrange travel, or discover products online; the goods may still come from a warehouse, a distribution site or a supplier.
About ten cents of each FY2025 merchandise-sales dollar began digitally, including purchases completed through several Costco routes. Faster growth makes this the expanding front door, while carriers, delivery partners and extra handling take a larger bite from each order than an in-person warehouse sale.
Competes with E-commerce, pickup, and Scan & Go (Sam's Club/Walmart) · Online Stores and Prime (Amazon)
Fresh FoodsMeat, produce, deli and bakery generated $37.99B in FY2025. This was the fastest-growing merchandise group in FY2026 Q2 at 11.9%; keeping prices sharp can lift traffic while trimming what Costco keeps per sale.Meat, produce, deli and bakery generated $37.99B in FY2025. This was the fastest-growing merchandise group in FY2026 Q2 at 11.9%; keeping prices sharp can lift traffic while trimming what Costco keeps per sale.
In plain English
Meat counters, produce crates, deli trays and bakery racks turn the warehouse into a place for tonight's dinner, not just long-life bulk goods. Fresh food spoils, so speed matters all the way from supplier to checkout.
Households and small businesses buy repeatedly, giving Costco traffic and a large sales stream. Growers and processors supply the goods; refrigerated depots and warehouse preparation keep them usable. The balancing act is like running a relay against a clock: low prices can bring more shoppers, but waste, cold-storage failures or extra price cuts can quickly consume the gain.
Competes with Fresh, Freezer and Cooler (Sam's Club/Walmart) · Perishables (BJ's Wholesale Club)
MembershipsAnnual access fees brought in $5.32B in FY2025—small beside merchandise sales, but equal to 51.3% of Costco's profit from running its stores and services. Worldwide renewal eased to 92.2% by FY2026 Q3, making perceived savings the key watchpoint.Annual access fees brought in $5.32B in FY2025—small beside merchandise sales, but equal to 51.3% of Costco's profit from running its stores and services. Worldwide renewal eased to 92.2% by FY2026 Q3, making perceived savings the key watchpoint.
In plain English
The small annual payment unlocks nearly everything else. Gold Star and Business members pay the base price; Executive members pay twice as much and receive two cents back for each eligible dollar spent, up to a yearly limit.
Fees arrive before a year of access is delivered, giving Costco dependable cash while members do the shopping that creates merchandise sales. The fee pool is tiny next to the checkout total but enormous beside what remains after Costco pays its operating costs. Renewal is the pulse: if members stop seeing enough savings and useful services, both fee income and store traffic weaken.
Competes with Club and Plus (Sam's Club/Walmart) · Club and Club+ (BJ's Wholesale Club) · Prime (Amazon)
Named in filings, launches and programs
- Costco Pharmacy / Costco Member Prescription ProgramServiceWarehouse and online prescriptions, plus a cash-discount program, make healthcare another reason to use the membership.
- Costco OpticalServiceIn-warehouse eye exams and eyewear are supported by Costco's own optical laboratories.
- Costco Hearing Aid CentersServiceHearing tests and devices extend the warehouse's practical member services.
- Costco Food CourtServiceA short prepared-food menu adds convenience to warehouse visits.
- Costco Tire Centers / Tire InstallationServiceTire sales sit in Non-Foods, while installation belongs to warehouse services.
- Costco Business CenterEcosystemWarehouses tailored to restaurants, convenience stores and offices extend the club format to business buyers.
- Costco TravelServiceMembers can book vacation packages, hotels, cruises and rental cars; those purchases also count in broader digital activity.
- Costco LogisticsEcosystemThe delivery network handles large, awkward items that do not fit an ordinary parcel route.
- Same-Day DeliveryService · RampingDelivery partners carry digitally ordered groceries and merchandise to members, extending the warehouse beyond the parking lot.
- Costco Retail MediaPlatform · RampingA developing advertising and product-discovery service uses Google Commerce Media and YouTube to connect suppliers with shoppers.
- Costco Wholesale IndustriesEcosystemCostco's manufacturing arm handles selected food packaging, optical work, meat processing and jewelry distribution.
- Costco Auto ProgramServiceA referral service helps members shop for vehicles and obtain service discounts.
- Costco Anywhere Visa Card by CitiCustomer programThe co-branded payment card adds rewards; Citi's payments to Costco help fund member rewards.
- Costco–SCAN senior insurance productsCustomer program · AnnouncedPlanned senior-health insurance offerings await regulatory review in the announced states.
Costco Pharmacy / Costco Member Prescription ProgramService
Warehouse and online prescriptions, plus a cash-discount program, make healthcare another reason to use the membership.
Costco OpticalService
In-warehouse eye exams and eyewear are supported by Costco's own optical laboratories.
Costco Hearing Aid CentersService
Hearing tests and devices extend the warehouse's practical member services.
Costco Food CourtService
A short prepared-food menu adds convenience to warehouse visits.
Costco Tire Centers / Tire InstallationService
Tire sales sit in Non-Foods, while installation belongs to warehouse services.
Costco Business CenterEcosystem
Warehouses tailored to restaurants, convenience stores and offices extend the club format to business buyers.
Costco TravelService
Members can book vacation packages, hotels, cruises and rental cars; those purchases also count in broader digital activity.
Costco LogisticsEcosystem
The delivery network handles large, awkward items that do not fit an ordinary parcel route.
Same-Day DeliveryService · Ramping
Delivery partners carry digitally ordered groceries and merchandise to members, extending the warehouse beyond the parking lot.
Costco Retail MediaPlatform · Ramping
A developing advertising and product-discovery service uses Google Commerce Media and YouTube to connect suppliers with shoppers.
Costco Wholesale IndustriesEcosystem
Costco's manufacturing arm handles selected food packaging, optical work, meat processing and jewelry distribution.
Costco Auto ProgramService
A referral service helps members shop for vehicles and obtain service discounts.
Costco Anywhere Visa Card by CitiCustomer program
The co-branded payment card adds rewards; Citi's payments to Costco help fund member rewards.
Costco–SCAN senior insurance productsCustomer program · Announced
Planned senior-health insurance offerings await regulatory review in the announced states.