What this means, say its customers, is that shopping at
Costco is
fun.
Dallas retail consultant Tracey Altman has as little success
sticking to her shopping list as the average customer, even though
she knows the tactics Costco uses to induce her to buy. Besides,
Costco is one of the few stores where her husband likes to shop.
During a recent excursion, she says with a laugh, he had to be
restrained from buying a $10,000 flat screen television priced at
$2,000.
"One of the things that impresses me most about Costco," says
Altman, "is that it did change from a toilet paper destination to a
place where people go regularly not just to buy toilet paper, but
to see what else is there. So I can buy my box of Tide and spend
less for it than elsewhere, while my husband can look at the flat
screen TVs."
KEEPING THE BUZZ
This is not to say Costco is perfect. Sighing, Sinegal recites a
long list of mistakes, including too-rapid expansion in the Midwest
and Southeast, where the company eventually closed some of the
stores. The company's smaller margins, meanwhile, give it little
room for error - which
Wall Street reminds Costco of regularly. Its
stock was at $32 a share in summer 2003, well off its $60 high in
2000, despite little debt, steady earnings and sales growth, and
adoring customers.
And no company that competes with
Wal-Mart is ever free from
worry.
"Competition is a fact of life," says Sinegal. "It's painful, and
everyone who has it would just as soon not have any. But the other
truth is that, without competition, you're in big trouble. You get
complacent, and the one thing we don't want to be is
complacent."
Not that any of its customers believe that's possible.
"You name it, they have it," says Cherie Lydick from
Florida. "If I
want a national brand, it's there. The price they have is always
going to be the best price, and I don't even have to check about
the price. I know it's going to be the best price."