- Costco has grown revenues by more than the rise in US retail sales in 19 out of the past 20 years
- Based on store population density analysis, the company has decades of prospective growth ahead
“Costco offers good answers to many of the questions we ask of potential cheap endurable investments. The mental model is one of scale economics shared. For a retailer, this means running the operations at persistently low margins with the benefits of economies of scale returned to customers in the form of lower prices – rather than being allowed to drop through to the bottom line. Almost all of Costco’s profits can be attributed to income from fees charged to club members instead of marking up goods on the shelf. The result is an increasingly attractive offering which grows the business and results in lower prices in a virtuous cycle.