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Transcript costcorevised.ppt
Daniel Bernards
Austin Hutcheson
Nicole Stefanek
Company Overview
Costco operates an international chain of
membership warehouses, mainly under the
“Costco Warehouse” brand name
Headquarters are located in Issaquah,
Washington and employs about 142,000
people nationwide
Provides a limited selection of nationally
branded and private-label products across
a wide range of merchandise categories at
lower prices than competitors
Known for their bulk merchandise
Company Overview
Recorded revenues of $72,483 million in
the financial year ending in August 2008
Net profit was $1,282.7 million in the same
financial period
Size of stores range from 70,000 to
205,000 square feet
Carries an average of about 4,000 active
SKU’s per warehouse, compared to
competitors averaging about 40,000 to
140,000 SKU’s
Primary Merchandise Offerings
Broad categories include:
Sundries, hardlines, food, softlines, fresh
foods
Besides branded products, Costco
offers a range of private label products
under the brand name Kirkland
Signature
Various categories: juice, cookies, coffee,
tires, housewares, luggage, appliances,
clothing, detergent
Other Retail Formats
“Costco Home”
Offers home furnishings and décor products including window
treatments, carpeting, and cabinetry
Locations: Washington, Arizona
“Costco Business Center”
Customized products for food service, convenience stores and
offices
Office supplies, furniture, machines and break room supplies,
convenience store supplies and resale items, espresso
shop/stand supplies, restaurant supplies, equipment, and
ingredients
Strengths
Strong market position
5th largest retailer in the US and 8th largest in the
world
Ranked 29th in the Fortune 500 list of America’s
largest corporations based on sales
Rapid inventory turnover rate
High inventory rate reduces cost and shrinkage
In 2008, inventory turnover rate was 12.8, compared
to its competitors:
○ BJ’s Wholesale Club 9.4
○ Wal-Mart 8.3
○ PriceSmart 8.9
Low Marketing Costs
Weaknesses
Concentrated presence in California
27% of net sales in 2008
Lax quality control
Purchases from foreign and domestic
vendors gives them limited control over the
quality of the products
Opportunities
Growth in online retailing
Retail spending in U.S. was $128 billion in
2007, and is expected to reach $215 billion
by 2012
Shifting of consumer demand towards
private label products
The purchase of high priced items has
shifted to affordable private label products
Threats
Impact of intense competition
Wal-Mart’s Sam’s Club, BJ’s Wholesale
Club, and Target
Consumer confidence
Economic slowdown in the global economy
Affects the discretionary consumer spending
as consumer gets cautious about job
security and debt level
Sources
http://www.costcoauto.com/default.aspx
http://www.costco.com/
http://www.suncoraz.com/images/PICT0151_000.JPG
http://static.px.yelp.com/bphoto/cY32swx8bHTFnn13mJnlOw/l
http://www.youtube.com/watch?v=3LR7ZhdGXXg