Costco Plans to Open 31 New Locations, Including 24 in the US

Costco, the popular wholesale club, has announced its plans to open 31 new locations this year. This includes approximately 24 new warehouses in the United States and seven international warehouses. The company's expansion efforts come after experiencing significant growth in revenue from membership fees.

Revenue Growth and Membership Crackdown

During an earnings call, Costco's CFO, Richard Galanti, revealed that the company reported quarterly sales of $56.7 billion, marking a 6.1% increase compared to the previous year. Notably, revenue from membership fees saw a growth rate of over 8% for the quarter.

This boost in revenue can be attributed to a crackdown on member card sharing, which allowed Costco to ensure that membership fees were being paid by genuine members. This initiative has proven successful, resulting in increased revenue growth from membership fees.

International Expansion and Relocation Plans

While the majority of the new locations will be in the US, Costco remains committed to expanding its international presence. Galanti expressed that the company is continuously exploring opportunities for growth in the US market and plans to increase its rate of international openings.

Additionally, Galanti mentioned that two current locations would be relocated, further demonstrating Costco's commitment to optimizing its operations and enhancing the shopping experience for its members.

Continued Growth and Future Goals

With the planned opening of 31 new locations this year, Costco is exceeding its own target of 30 new openings per year. The company aims to achieve a balanced expansion strategy, with half of the new warehouses located in the US and the other half overseas.

Costco warehouses vary in size, ranging from 80,000 to 230,000 square feet, with an average size of 147,000 square feet. However, the company is also working on a proposed location in Fresno, California, which is set to be the largest in its fleet, spanning over 241,000 square feet.

Current Operations

Currently, Costco operates a total of 871 locations worldwide. Of these, 600 warehouses are located in the United States, while the remaining 271 warehouses are spread across 13 other countries.

With its continued growth and expansion efforts, Costco remains a leading player in the wholesale club industry, providing its members with a wide range of high-quality products at competitive prices.

Source: Business Insider

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By: dreuter@businessinsider.com (Dominick Reuter)
Title: Costco Plans to Open 31 New Locations, Including 24 in the US
Sourced From: www.businessinsider.com/costco-plans-open-31-new-locations-in-2024-2023-12
Published Date: Thu, 14 Dec 2023 23:05:43 +0000