Costco’s Chairman Speaks

Nov 21, 2002

By George Anderson

When Jeffrey Brotman and James Sinegal co-founded the warehouse club chain Costco in 1983 they were “hoping to ‘bring some romance’ to food and discount retailing”, says The News Tribune of Tacoma, Washington.

Nearly 20-years later, Messrs. Brotman (chairman) and Sinegal (chief executive officer) have seen their vision translated into 40 million dues paying members that are expected to spend $38 billion this year and $42 billion next year at Costco.

Today, Costco members can buy everything from automotive supplies to wine in the nearly 300 clubs operating in the US. The company is also planning to test two new formats, Costco Home to sell furniture, appliances and other home products and Costco Fresh, which will offer fresh produce and groceries to members.

Moderator’s Comment: What has made Costco so successful?
What do you see as the major challenges the warehouse club operator faces?

This is one company, which knows that the difference between
a discount and a bargain is the quality of the product sold. Costco sells quality
products at extremely low prices. Customers leave the club each time convinced
that they have found themselves a bargain. [George
Anderson – Moderator

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