We know Costco is popular, but exactly how popular? Well, the retailer is more in demand than we ever could have imagined.
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Bloomberg reports there are more Costco memberships than there are U.S. households that pay for cable television. And it is believed that most of the brand's new membership base is coming from the over two million Americans who bought a home for the first time last year. Interestingly, many of these homebuyers are millennials.
"We're getting our good share of younger people," said Chief Financial Officer Richard Galanti, during Costco's May earnings call, according to Bloomberg. "Historically, that was sometimes a concern of some on Wall Street. Is this for the older generation?" Apparently not! Who can resist a Costco bargain?
The fact that Costco continues to be popular is especially fascinating because they didn't adapt to the pandemic like other retailers. Many began offering curbside pickup options so customers could still shop, but Costco only started testing the service in New Mexico. Galanti reports that this trial period wasn't a huge success because most Costco members still want the treasure hunt thrill of shopping in person.
Now, the final question: Since Costco memberships are increasing, will the price also balloon? The answer, per Bloomberg, is possibly. Costco executives haven't directly commented, but Galanti did insinuate that Costco memberships have become more valuable because the brand acquired Innovel Solutions (now Costco Logistics), a company that allows Costco to deliver and install household items.
Yet, even if Costco does raise the price of its membership, will that change anything? It seems like people already can't get enough of shopping in the retailer's stores, so we have a feeling that a price change might not make a difference.