Costco, an iconic American brand, has stood the test of time. Here's why

• Costco is a dominant warehouse club in the U.S., known for its low prices and high customer loyalty.
• The retailer drives foot traffic and loyalty with loss leaders like its $1.50 hot dog combo and $4.99 rotisserie chicken.
• Membership fees are a primary driver of Costco's profits, accounting for a majority of its operating income.
• Despite some local opposition to new stores over traffic, safety and environmental concerns, the company plans to open 30 or more warehouses annually.

This story is part of the Iconic Brands series, a USA TODAY network project showcasing the companies and brands that helped shape the nation's identity, economy and culture. The series celebrates American ingenuity with a deeply reported examination of how brands intersect with history, community and everyday life in celebration of the nation's 250th anniversary. Find more athttps://crabstation.site/usa250/iconic-brands

When it comes to warehouse clubs, for many, Costco reigns supreme.

It's the big dog — in what has been described as essentially a three-dog race against rivals Sam's Club and BJ's Wholesale.

As of late 2025, Costco maintained its commanding lead in the U.S. warehouse club industry. Its market share has been estimated at more than 60%.

Over the last few decades, Costco has grown alongside America, with more than 630 locations across the country, capitalizing on the rise in consumerism and catering to value-conscious shoppers.

Costco maintains a cult-like following, with fiercely loyal customers. It boasts a membership renewal rate of nearly 90% worldwide.

It has a massive following on social media, particularly TikTok, driven by influencers and fan accounts, such as @costcohotfinds.

On social media, Costco fanatics have shared photos of their Costco-themed birthday parties, featuring warehouse-inspired decor and food. Some have gone as far as to host surprise birthday parties, to propose and to hold impromptu weddings inside stores (with no formal party or event packages offered).

In part, the retail giant's customer loyalty has been attributed to its consistency. One of those consistencies: The popular quarter-pound hot dog and 20-ounce soda combo sold in its food court remains priced at $1.50, a price that hasn't changed since its introduction in the 1980s.

Reddit users frequently discuss the infamous combo, noting that while it's clearly a financial loser for Costco, it's an intentional ploy to drive customer loyalty and foot traffic into its stores. On the topic, one user recently posted: "Costco makes up for it on the people like me, who went in for 'just a few things' and rang up $300."

Another Reddit user recently commented that if the price is ever raised on the combo, "we know that the world is cooked."

Costco is known for its bulk groceries, its premium Kirkland Signature private-label goods, and its deep discounts across the board on high-value, high-quality products, including electronics, furniture and appliances.

Gas pumps are a popular draw, offering consistently low member-exclusive fuel prices. Costco is set to open its first standalone gas station by June in Mission Viejo, California, as it continues to prioritize fuel.

Meanwhile, the first-ever Costco at a mixed-use development is under construction in south Los Angeles. The development will feature a new warehouse store with 800 apartments above it.

Florida transplants John and Linda Ann Ventura are part of the Costco fan club. That's why they're thrilled that one is going up about a mile from their East Naples home.

"The prices at Costco are extremely competitive, and much better than most," he said.

He pointed to a recent Consumer Reports study that used Walmart's prices as a baseline and found Costco is the cheapest grocer, coming in 21.4% less. BJ’s Wholesale Club followed closely behind — at 21%.

The study involved dozens of grocery retailers in five cities around the country. It was based on the cost of a basket of everyday foods, including packaged goods, fresh produce and meat.

When it comes to traditional grocery stores, the Venturas prefer Wegmans, but they can no longer shop there, unless they travel outside of Florida.

"Sadly, they are not located in Florida," he said.

In the Consumer Reports study, Wegmans ranked outside the top 10 for value anyway, below Walmart and other discount-driven competitors, such as Aldi and Lidl, two German-based discount grocery chain rivals known for their affordable prices.

By shopping at Costco, some members have reported saving more than $1,000 a year on groceries alone.

Costco is loved for more than its low prices

Like other loyal shoppers, the Venturas don't just love Costco for its low prices.

"The variety of goods you can buy at Costco is fantastic, from groceries to clothes, to household supplies, etc., etc., etc.," he said.

He added: "The quality of the goods you can buy at Costco is also fantastic. We've found the produce to be fresh, the meats and fish to be of high quality."

Another reason the Venturas are keen on Costco? The customer service, which they consider excellent.

"We're used to customer service from the Wegmans grocery store chain, which would rival any company in any business," he said. "We've found the customer service at Costco to be so much better than most other businesses."

Every year for Thanksgiving, the couple purchases 30 to 40 pumpkin pies from Costco for clients of their real estate business, and every year Costco "goes out of their way to accommodate our request," he said.

He continued: "Employees at Costco seem to enjoy working there, and they pass that good attitude onto us customers."

Costco's success story spans decades

Founded by Jim Sinegal and Jeff Brotman, the retailer opened its first warehouse in Seattle, Washington, in 1983. The company went public two years later, with an initial stock price of $10. It operated just 17 stores at the time.

In a speech at the 2012 Democratic National Convention, Sinegal, who served as Costco's CEO for nearly 30 years, said: “We did not build our company in a vacuum. We built it in the greatest country on earth."

He spoke on behalf of Barack Obama's 2012 reelection campaign, where he argued that Obama was better for business than Mitt Romney.

The membership-based warehouse club concept was inspired by Sol and Robert Price, who opened the "Price Club" in 1976 in a converted airplane hangar in San Diego, California, offering deeply discounted, bulk goods to business owners.

In 1993, Costco merged with Price Club, becoming PriceCostco. In 1999, the current corporate name — Costco Wholesale Corporation — emerged.

As of early March, Costco operated 924 warehouses, with about 341,000 employees worldwide. It's one of the largest employers in the U.S. and consistently ranks as a top employer, in large part due to its industry-leading wages and comprehensive benefits.

Costco’s growth strategy includes opening 30 or more new warehouse stores annually, over the next five to 10 years, in both U.S. and international markets, to drive memberships. The strategy includes opening stores near existing high-traffic ones to alleviate crowding, improve the shopping experience and attract new customers.

Costco's expansion faces pushback

New store locations often face pushback from residential neighbors, but usually Costco wins out.

While the Venturas are happy about the new Costco coming to their East Naples neighborhood, he admits they have "a bit of apprehension about the impact on traffic."

The location faced strong opposition from many of his neighbors, with concerns about its impact on traffic, safety and property values — and on nature and the environment. Still, the project won county approval, with Collier County commissioners determining it should be allowed on a vacant, wooded site that already had commercial zoning.

After the approval, opponents of the store reached a settlement with Costco, which is expected to lead to enhanced signage to improve pedestrian safety. The settlement includes more landscaping, plus a $35,000 donation to the nearby Esplanade community to improve road access.

Even with the additional compromises, some residents remain upset that the store, as planned, couldn't be stopped. That includes Esplanade resident Frank Cipolla, one of the most vocal critics of the project, which he's labeled a "monstrosity."

"It will lead to accidents, injuries and death," he said.

At the public hearings for the project, Diego Zaragoza, who lives in Golden Gate, a neighboring community to East Naples, characterized the opposition to the store as "hypocritical and laughable" in an area that had seen a surge in residential development that blazed through natural landscapes and ecosystems.

"Build that Costco," he told county commissioners. "For the entire long-term resident of Naples. Please and thank you."

Memberships drive profits for Costco

As of early 2026, Costco had 145.9 million paid memberships globally. Memberships have grown consistently since 2014.

The retailer operates on a fiscal year that starts in September. Last year, Costco grew its net sales by 8% to $269.9 billion and increased its profits by 10% to $8.1 billion. Revenue from membership fees rose by the double digits to $5.3 billion, as the company expanded to 914 locations.

In the second quarter (ending Feb. 15), Costco beat Wall Street's expectations on revenue and earnings. Total revenue came in at $69.6 billion, including revenue from memberships.

Earnings rose by about 14% to $2.04 billion, or $4.58 a share.  

Net sales for the quarter, excluding memberships, increased 9.1% over the year, reaching $68.24 billion, with a 22.6% surge in digital sales and a 7.4% rise in comparable, or same-store, sales. These results came in lower than analysts expected, and company shares dipped as a result, with growing concerns raised about the retailer's ability to sustain long-term growth.

Costco has proved resilient, with its strong membership-driven model. Membership fees account for roughly 60% to 70% of the company's annual operating income. 

In 2024, Costco increased its membership fees for the first time since 2017, raising the charge for individuals to $65 from $60, and the cost for businesses to $130 from $120. As a result, the company has seen a nice increase in income from its memberships.

Despite the higher cost of membership, Coloradans Robert Calvo and his wife still see the value in it — and remain extremely loyal to the brand.

They first joined Costco years ago, when they lived in Southern California, and they kept their membership after relocating to Naples, Florida, then moving to Fort Collins, Colorado, where they continue to faithfully shop at the closest store.

"Just love their rotisserie chicken, have purchased many household appliances and even a couple of cars (through) their services," he wrote in an email.

He added: "I also enjoy their hot dog special at the food court, lol."

Like the hot dog combo, Costco’s $4.99 Kirkland Signature rotisserie chicken is described as a high-volume loss leader, designed to drive foot traffic, loyalty and membership renewals. The price of the iconic chicken hasn't changed since 2009.

Recently, the popular chickens have been in the news for different reasons, with Costco facing two proposed class-action lawsuits for allegedly making false "preservative-free" claims about them and failing to adequately protect them from the risk of Salmonella contamination.

Costco reported that it sold more than 157 million rotisserie chickens worldwide in 2025.

The grocer sells a lot more than chickens, hot dogs and gallons of gas.

On top of offering everyday staples, such as water and toilet paper, in more affordable bulk quantities, Costco carries big-ticket, high-end merchandise at a discount, from diamond rings to golf carts. Even gold bars — all with a low markup.

Costco is one of the most trusted brands in America

Michael Zakkour, founder and CEO of 5 New Digital, a retail and ecommerce consultancy, based in New Jersey, pointed out that Costco consistently ranks as one of the most trusted brands in America.

"Boy oh boy, I wish I had dropped a few dollars on that stock years ago," he said. "What a success story, huh?"

Over the past five years, company shares have nearly tripled in price. In 2026, they've frequently traded for more than $1,000.

Asked about Costco's secret sauce for success, Zakkour said: "They are absolutely committed to putting the customers first, right? They don't put the vendors first. They don't put the suppliers first. They don't put anything else first."

The way Costo reinforces its commitment to customers is through good communication and by keeping its promises of "certain rights and privileges" that come with membership, most importantly, low prices across the board, he said.

"Their commitment is to never charge more than a 10% margin on any product they are buying and selling," Zakkour said. "When you look at the average, the industry average, it's a 20% to 30% margin."

In the last five years, warehouse clubs have seen a surge in demand, as consumers have looked for ways to deal with rising food costs and inflation. Costco has been a big beneficiary, thriving on word-of-mouth marketing by happy customers.

Bottom line: The retailer is really good about taking care of customers and building loyalty, Zakkour said.

Offering up a personal example, as a long-time member of the club himself, Zakkour shared how he gets $300 to $400 back to spend at Costco every year, based on rewards earned by his family's purchases.

His family of three shops at Costco about once a week.

"I'm not going there and buying the 8-pound tub of macaroni salad, but I may buy the 24-pack of water and essentials," he said.

Another big reason he and other customers shop often at the warehouse club — the mystery and the element of surprise, with 20% to 25% of Costco's product offerings in a near constant state of flux, Zakkour said.

"You never know what you are going to find, and the discovery and the search, the treasure hunt is almost as satisfying, if not in some ways, more satisfying than actually making the purchase," he said.

The thrill of the hunt at Costco even inspired a book. It's the subject of 2023's The Joy of Costco: A Treasure Hunt from A to Z, written by David and Susan Schwartz, who share personal insights from their travels to more than 200 Costco warehouses around the world.

What else sets Costco apart? Its signature Kirkland products.

"People don't even look at Kirkland as a private label," Zakkour said. "Kirkland is seen as a brand across products and categories that is equal to or superior to other brands that are on the shelf today."

Costco has created a commercial ecosystem that enables it to virtually sell any product or service as a trusted brand. Members have access to a variety of services, including travel, optical, pharmacy and tire services.

The retailer is recognized as a master of logistics and technology. It's rapidly growing its online business, with the help of more digital tools, including enhanced personalization.

"They appeal to almost every demographic, every geographic, every psychographic, and every income level," Zakkour said. "How many retailers can claim that?"

In fact, he struggled to find anything bad to say about Costco, considering it the "gold standard" of retail.

On social media, one of the biggest complaints expressed by members has been about the slow speed of checkout, which Costco is working on.

In the company's latest earnings call, Ron Vachris, Costco Wholesale's president and CEO, said: "In the warehouses, we're achieving meaningful improvements in the speed of checkout, employee productivity, both as a result of our mobile wallet enhancements, pharmacy pay ahead and the rollout of employee pre-scan technology."

He continued: "We're also piloting automated pay stations that will allow members to pay for their pre-scanned orders seamlessly with an average transaction time of around 8 seconds. Early results show this is improving the flow of traffic, and we've received great member feedback."

Costco is a time-tested retail behemoth 

Costco ranks as the world's third-largest retailer in the world, behind Walmart and Amazon, based on revenue.

Some Costco stores generate more revenue a year than entire businesses, noted Shikha Jain, a lead partner for consumer/retail in North America and head of the Boston office at consultancy Simon-Kucher.

The business model helps drive more store visits, as customers of all income levels look to get their money's worth out of their memberships, and for ways to deal with rising food and other living costs over time, Jain said.

"You are creating this idea of exclusivity almost," she said.

Customers can get the best prices, and they can find the best assortment of products at a discount, while shopping in stores with layouts that are easily understood and easy to navigate, making for a pleasurable shopping experience, Jain said.

The high sampling culture, including hot foods, adds to the draw, while helping to build customer loyalty and to push new products, she said.

Many Costco shoppers are wealthy. While they are frugal shoppers, they can afford bigger ticket items, such as jewelry and furniture, and they appreciate the exclusive, value-driven offers, which can exceed the cost of their memberships.

Costco has chosen good locations for its stores, which are "very much in the right neighborhoods," where they can attract the right number of customers, including affluent ones, Jain said.

As for Costco's aggressive growth strategy, she's not worried that the retailer is getting too far ahead of itself in opening more stores.

"Grocery is going to be evergreen," Jain said. "People need food to survive, so grocery expansion is a new way to reach new populations."

Company analysts remain bullish on Costco's long-term prospects.

Costco remains a beloved American institution, described as a beacon of stability and growth in the challenging and unpredictable world of retail.

How the list was chosen

The Iconic Brands 50 list identifies American companies that most profoundly shaped the nation’s identity, economy and culture. Selection emphasized historical significance, industry-building innovation, measurable economic influence and lasting cultural impact. Brands were chosen for transforming daily life or becoming enduring symbols of American values. Long-term relevance and sustained national influence carried greater weight than short-term financial performance or recent popularity.