Costco’s Unique Business Model Drives Retail Success

SEATTLE, Wash. — Costco Wholesale has become a standout name in the retail industry, known for its unique membership model and strong sales growth. The company boasts a market capitalization of approximately $429 billion and saw a slight decrease of 0.30% in its stock price, which was reported at $964.99 as of September 15, 2025.

Costco’s success in a competitive market stems from its innovative approach to retail. While many retail businesses unfortunately fail, with over 58% of them closing within their first ten years according to 2024 data from the U.S. Bureau of Labor Statistics, Costco has carved out a niche that keeps customers returning.

One of the key features of Costco is its membership requirement, which costs $65 annually for basic members and $130 for executive members. This policy ensures that shoppers invest in their membership, making them likely to maximize their purchases during each visit. Costco strategically keeps its prices low on essential items, relying on membership fees to maintain profitability.

One iconic offering that has drawn customers’ attention is the infamous $1.50 hot dog and soda combo, a staple in its food courts for over 41 years. Despite rising costs, CEO Ron Vachris confirmed the company has maintained this price point by sourcing low-cost supplies, including the recent switch back to Coca-Cola products.

Costco’s approach to merchandise goes beyond typical grocery items. The retailer has been known to sell unexpected products, from one-ounce gold bars introduced in late 2023 to an array of luxury watches, creating a sense of intrigue and attracting diverse customers.

Furthermore, Costco has recently enhanced the experience for executive members, who generate a significant portion of the company’s sales, by introducing exclusive shopping hours. Executive members can shop from 9 a.m. to 10 a.m. on weekdays and Sundays, along with a limited access window on Saturdays, which covers nearly 80 million members.

Overall, these unique business practices have contributed to Costco’s remarkable success and enduring popularity, with its shares increasing over 8,900% since it went public in December 1985. As it continues to expand and evolve, Costco remains a fascinating case study in successful retail strategies.