According to Forbes, Costco released a statement saying quarterly profit was higher by 39 percent due to increased sales as well as membership fees.
Last year at this time, the company was at 90 cents per share. This year they are at $1.24 per share.
Forbes believes that food price inflation is contributing to their increase in sales. Forbes also explained that in 2009, they obtained 2.3 million members and 4 million were added in 2011. Many consumers were satisfied with their memberships therefore they renewed. The renewal rate for North America was 89.7% and 86.4% worldwide, Forbes reported.
There are a number of factors that could be causing the retailor to experience an increase in sales. The first one is they offer consumers high quality items at a fraction of what they normally cost. Costco sells them in large quantities. The retailor sells more than just food at a lower cost; they also offer consumers gift baskets, clothing, bottled water, napkins, and coffee, plates and kitchen utensils.
The retailor offers customers name brand clothing for a lower price. They supply brands like Ellen Tracy, Karen Kane and occasionally carry higher priced denim jean companies like True Religion and 7 For All Mankind. The retailor also has a Pharmacy and carries health items such as protein powder, vitamin supplements and protein bars. Costco is currently supplying consumers with weight loss products such as Smart For Life, a 60 day kit that included Smart Cookies, Shakes, Soup Pouches and more. The products are 60% organic, all natural and do not contain any preservatives.
According to the company's official website, the Company's first location opened in 1976 under the Price Club name and was in a converted airplane hangar on Morena Boulevard in San Diego. Originally serving only small businesses, the company found it could achieve far greater buying clout by also serving a selected audience of non-business members.
The retailor offers consumers three different types of memberships, Executive, Business and Gold Star. The Executive cost is a yearly payment of $110. Executive members get a 2% reward up to $750 on most purchases along with other benefits. The Business membership is only $55 a year and allows Business owners and managers the opportunity to purchase items for business, personal and resale use.
The Gold Star membership is also $55 a year and allows consumers to purchase item for their personal use.
