Costco Wholesale Corporation(NASDAQ:COST) has not experienced any problems in terms of its growth progress in the past several years, instead it has been progressing in a steady direction after every Q, which might be a result of its increased member base and widening. Total cardholders have risen from 54.2 million – 72.8 million in 2008 to 2013, whereas the store count reached to 634 from 512. The revenues were found to have risen at 8% yearly. The company’s stock rose higher than 100% in the same time span.
The retailer’s stock has risen above 18% in the last one year. The market apparently seems not to be cooperating with the company’s steady growth. This might be due to the anticipation of continuing its performance in the upcoming years. The company is predicted to have still been overpriced. The estimated prices for Costco are at US$130, more than 5% over the recent market ongoing price range.
The company is on a tougher side with its rival Amazon, who is its biggest threat to its ongoing steady growth. The retailer counterpart, Sam’s Club, also provides various attributes for giving a competitive advantage over Costco. An imminent threat from Amazon and Wal-Mart’s warehouse club cannot be ignored, even if the warehouse retailers seem to have issues with their rivals or customer’s trust.
Costco is best known for its better warehouse retailer option in the USA, but that does not mean Sam’s Club lags behind in any way. In 2013, when Costco announced its revenue of US$62.2 billion, Sam’s Club revenues were US$57.2 billion. To some customers, Sam’s Club seems more appealing. Compared to an annual membership fee of $55 at Costco, Sam’s Club charges only $45 to its members. While an executive member at Costco pays $110 per year, Sam’s Club’s plus members pay only $100.
What threat does the company have from Amazon in reality? Around 45% of Amazon’s customers shop mostly at Costco. According to survey research and calculations, Costco has been found to be more expensive than Amazon in various product categories.