Loyalty can’t be bought, even with a membership. That’s something that Costco Wholesale Corp. has learned — and honed to its advantage — over the years.
As a result of its business approach and the strategies that support it, the club store chain — which operates 839 warehouses globally and 578 in the United States and Puerto Rico — continually lands in the top tier of third-party polls of both shoppers and employees. Costco ranked first on Newsweek’s recent list of superstores and warehouse clubs, based on a survey of 30,000 customers. In another Newsweek poll of America’s Most Trustworthy Companies, the Issaquah, Wash.-based retailer came in 10th.
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Some consumers really get into their personal Costco store. A survey released in October by FinanceBuzz shared the states with the highest Costco ratings based on factors like stock, friendliness and cleanliness, and pegged the winner as South Carolina, followed by Ohio, Tennessee, Missouri and Connecticut. A look at social media reveals an array of Costco-centric fan pages.
Renewal rates are a solid indication of member loyalty, and to that end, Costco’s membership renewal rate reached 92.6% in the United States and Canada by the end of its recently concluded fourth quarter. The retailer’s latest financial report shows a base of 65.8 million paid household members and 118.9 million cardholders.
“We’ve been fortunate in the last couple of years to see new member signups increase at a higher rate and renewal rates to go to their highest levels in history,” Costco CFO Richard Galanti tells Progressive Grocer. “Even for first-year members, when they sign up for year two, those rates are higher than they have been historically.”
Likewise, employees give Costco high marks. The company topped Forbes’ prestigious list of America’s Best Employers by State in Colorado, Idaho, Nevada and Washington, and placed in the top five in nine additional states. On a global basis, Costco was seventh on Forbes’ latest ranking of the World’s Best Employers.
In Progressive Grocer’s own list of the top 100 food and consumables retailers in North America, Costco comes in at No. 3 for 2022. The PG 100 is based on public and private sources, independent research, and proven forecasting techniques.