Costco's business model centered around membership fees allows it to offer low prices

From Nasdaq: 2024-12-21 10:00:00

In a challenging economic environment for retailers, Costco Wholesale (NASDAQ: COST) stands out with impressive growth and margin expansion. While other major retailers like Starbucks (NASDAQ: SBUX) and Target (NYSE: TGT) are struggling, Costco’s winning business model centered around membership fees allows it to offer low prices and maintain thin margins. This model has attracted a diverse customer base and helped Costco thrive, with membership fees accounting for over half of its operating income. Despite its high valuation, Costco continues to succeed by attracting price-sensitive consumers and offering unbeatable bargains.



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