{"id":27025,"date":"2024-08-21T16:41:02","date_gmt":"2024-08-21T16:41:02","guid":{"rendered":"https:\/\/tvbrazilusa.com\/2024\/08\/21\/how-costco-hacked-the-american-shopping-psyche\/"},"modified":"2024-08-21T17:52:20","modified_gmt":"2024-08-21T17:52:20","slug":"how-costco-hacked-the-american-shopping-psyche","status":"publish","type":"post","link":"https:\/\/tvbrazilusa.com\/pt\/2024\/08\/21\/how-costco-hacked-the-american-shopping-psyche\/","title":{"rendered":"How Costco hacked the American shopping psyche"},"content":{"rendered":"<p> <script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-8864793242727901\"\r\n     crossorigin=\"anonymous\"><\/script><br \/>\n<\/p>\n<div id=\"\">\n<header class=\"m-article-header m-article-header--standard\">\n\t\t\t\t\t\t\t\t\t\t\t\t<span id=\"article-header-primary-term\"><br \/>\n\t\t\t\t\t\t\t\t<a class=\"a-term a-term--primary\" href=\"https:\/\/www.boston.com\/tag\/national-news\/\"><br \/>\n\t\t\t\t\t\t\t\tNational News\t\t\t\t\t\t\t\t<\/a><br \/>\n\t\t\t\t\t\t\t<\/span><\/p>\n<h2 class=\"m-article-header__sub-headline\">More than 100 million people visit the retailer for their groceries \u2014 and gas and TVs and gold bars and pet coffins \u2014 but saving money may not be the only motive.<\/h2>\n<figure class=\"a-photo m-article-header__photo\"><figcaption class=\"a-photo__caption\">\n\tCostco, which is the third-largest retailer in the world, has changed how Americans shop in the last 40 years, making both bulk buying and the acquisition of big-ticket items on grocery runs a regular occurrence.<em> Kerry Tasker \/ The New York Times<\/em>\t<\/figcaption><\/figure>\n<div class=\"m-article-header__meta\">\n<div class=\"m-article-header__byline\">\n<p class=\"m-article-header__author\">\n\t\t\t\t\t\t\t\tBy Ben Ryder Howe, New York Times Service\t\t\t\t\t\t\t<\/p>\n<p>\t\t\t\t\t\t    \t\t\t\t\t\t\t<time class=\"m-article-header__date\"><br \/>\n        \t\t\t\t\t\t\tupdated on August 21, 2024 | 12:41 PM    \t\t\t\t\t\t\t<\/time><\/p><\/div>\n<\/p><\/div>\n<\/header>\n<p>ANCHORAGE, Alaska \u2014 When it opened in 1984, the Costco on West Dimond Boulevard in Anchorage, Alaska, did not seem like the future of food. A glorified shed the color of stale coffee, the warehouse offered the sort of products and deals Alaskans go crazy for: mammoth quantities of staples such as peanut butter and tomato sauce, along with local favorites such as caribou sausage. The state\u2019s extreme environment and the need to travel hours or even days for groceries made it a hit right off the bat.<\/p>\n<p>Today the parking lot, full of jacked-up, Thuled-out 4x4s on studded tires and mobile homes that look more like mobile fortresses, has a bit of an edge for a grocery store. There\u2019s something edgy about the inventory, too: neoprene survival suits, meat grinders, gun safes.<\/p>\n<p>Inside the vast store, overloaded shopping carts seemingly pilot themselves down the aisles. One was pushed by Gabriella Pelesasa, a teenager who was buying, among other things, a pair of whole pigs, at 45 pounds each.<\/p>\n<p>As her sister sat on the cart eating a Costco hot dog, Pelesasa reported simply, \u201cThey have bigger versions of what we want.\u201d<\/p>\n<p>Though the Anchorage location, one of the retailer\u2019s first, once seemed like a survivalist outlier, today it shows how visionary Costco was.<\/p>\n<p>\u201cIn 2020, about one-quarter of the population stockpiled nonperishable foods,\u201d said Jennifer Mapes-Christ of the market research firm Packaged Facts. Today, more than half do. Mapes-Christ said that while the pandemic was an accelerant, the trend began before that, driven by anxieties about climate change and economic instability.<\/p>\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"2560\" height=\"1920\" src=\"https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_qvTLrDYL-66c616edda062-scaled.jpg\" alt=\"\" class=\"wp-image-31353994\" srcset=\"https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_qvTLrDYL-66c616edda062-scaled.jpg?width=200 200w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_qvTLrDYL-66c616edda062-scaled.jpg?width=300 300w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_qvTLrDYL-66c616edda062-scaled.jpg?width=400 400w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_qvTLrDYL-66c616edda062-scaled.jpg?width=500 500w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_qvTLrDYL-66c616edda062-scaled.jpg?width=600 600w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_qvTLrDYL-66c616edda062-scaled.jpg?width=700 700w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_qvTLrDYL-66c616edda062-scaled.jpg?width=800 800w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_qvTLrDYL-66c616edda062-scaled.jpg?width=900 900w\" sizes=\"auto, (max-width: 2560px) 100vw, 2560px\"\/><figcaption class=\"wp-element-caption\">A Costco store in Anchorage. The average size of a warehouse is 147,000 square feet. <em>Kerry Tasker \/ The New York Times<\/em><\/figcaption><\/figure>\n<p>In 2019, one-quarter of U.S. consumers shopped at Costco. Today it is nearly one-third. Costco is the third-largest retailer in the world, behind only Amazon and Walmart.<\/p>\n<p>But the success of Costco goes far beyond hoarding. The company has hacked the psyche of the American consumer, appealing to both the responsible-shopping superego (\u201cTwelve cans of tuna for $18!\u201d) and the buy-it-now id (\u201cI deserve that 98-inch flat screen\u201d).<\/p>\n<p>Ostensibly, Costco is a discount store, a place to save money and stretch your grocery dollar, but it is also an aspirational shopping experience, feeding that most American of appetites: conspicuous consumption.<\/p>\n<p>Few companies have greater influence over what we eat (or wear, or fuel our cars with, or use for personal hygiene). Costco dominates multiple categories of the food supply \u2014 beef, poultry, organic produce, even fine wine from Bordeaux, which it sells more of than any retailer in the world. It is the arbiter of survival for millions of producers, including more than 1 million cashew farmers in Africa alone. (Costco sells half the world\u2019s cashews.) Its private label, Kirkland, generates more revenue than towering brands like Nike and Coca-Cola.<\/p>\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"2560\" height=\"1707\" src=\"https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_XET5Dyxp-66c6172aab720-scaled.jpg\" alt=\"\" class=\"wp-image-31354012\" srcset=\"https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_XET5Dyxp-66c6172aab720-scaled.jpg?width=200 200w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_XET5Dyxp-66c6172aab720-scaled.jpg?width=300 300w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_XET5Dyxp-66c6172aab720-scaled.jpg?width=400 400w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_XET5Dyxp-66c6172aab720-scaled.jpg?width=500 500w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_XET5Dyxp-66c6172aab720-scaled.jpg?width=600 600w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_XET5Dyxp-66c6172aab720-scaled.jpg?width=700 700w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_XET5Dyxp-66c6172aab720-scaled.jpg?width=800 800w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_XET5Dyxp-66c6172aab720-scaled.jpg?width=900 900w\" sizes=\"auto, (max-width: 2560px) 100vw, 2560px\"\/><figcaption class=\"wp-element-caption\">The Anchorage location, Warehouse No. 10, opened in 1984. <em>Kerry Tasker \/ The New York Times<\/em><\/figcaption><\/figure>\n<p>For all its success, the company is not well understood. The top brass are insular and secretive. And beyond quarterly reports, Costco rarely discloses anything of its inner workings.<\/p>\n<p>But to Charlie Munger, the billionaire investor and Warren Buffett\u2019s right hand at Berkshire Hathaway, the balance sheet speaks for itself. In one of <a href=\"https:\/\/steadycompounding.com\/investing\/djco23\/\">his last interviews<\/a> before he <a href=\"https:\/\/www.nytimes.com\/2023\/11\/28\/business\/charles-t-munger-dead.html\">died last year<\/a>, he was succinct: \u201cIt is a perfect damn company.\u201d<\/p>\n<h2 class=\"wp-block-heading\" id=\"h-everything-was-about-trust\"><b>\u2018Everything was about trust\u2019 <\/b><\/h2>\n<p>Costco has often been likened to a cult, in part because once members \u2014 134 million worldwide \u2014 enter the fold, they rarely leave.<\/p>\n<p>Indeed, devotion to the brand is so avid it has inspired tributes on social media, bits on late-night shows by <a href=\"https:\/\/www.youtube.com\/watch?v=p7XoT7P_qDA\">celebrities hoping to seem relatable<\/a> and even a book, \u201c<a href=\"https:\/\/seattlemag.com\/food-and-culture\/the-joy-of-costco\/\">The Joy of Costco<\/a>.\u201d<\/p>\n<p>At a time when Americans increasingly view big brands as predatory monopolies or fumbling, broken-down legacies, Costco is revered for its high wages, attentive customer service and \u201cdeep commitment to integrity,\u201d said Jeremy Smith, the president of Launchpad, an Oregon-based food brand incubator that specializes in placing products at Costco.<\/p>\n<p>Whether Costco is a cult or not, its founder was a Bronx-born lawyer with utopian ideals and strict morals.<\/p>\n<p>Sol Price, born in 1916, was the son of garment workers from Minsk, Poland, and belonged to the generation of displaced Jews and other Europeans who thrived in New York\u2019s small businesses \u2014 the delis, candy shops and pawnshops of the Depression and postwar years. In the 1920s, the family moved to San Diego, where he went to high school.<\/p>\n<p>After law school at the University of Southern California, Price started his career representing grocers and other merchants. With the temperament of a shopkeeper who obsesses over his customers and fusses over the smallest of details, in the 1950s Price began converting empty San Diego warehouses into members-only bazaars where for a small fee, shoppers could get everything from hosiery to cigarettes at wholesale prices. The key to the business, called FedMart, was simple: keep members renewing year after year.<\/p>\n<p>In 2003, Price described his philosophy to Fortune magazine as \u201cHow do we sell stuff at the lowest markup?\u201d The overriding goal, he said, was \u201cto look at everything from the standpoint of, is it really being honest with the customer?\u201d<\/p>\n<p>Price had a gift for connecting with shoppers at a time of exploding prosperity and social change, but paradoxically, one of his rules was not making too much money.<\/p>\n<p>\u201cHe grew up in a family of socialists. He was a capitalist. He liked to make money, but he was pro-union, pro-labor, pro-little guy,\u201d said David Schwartz, who co-wrote \u201cThe Joy of Costco\u201d with his wife, Susan. \u201cEverything was about trust. He would rather lose your business than your trust.\u201d<\/p>\n<p>Through a series of mergers over the years, Sol Price\u2019s FedMart became what we know as Costco in the 1990s. To an uncanny degree for a modern corporation, the company, now headquartered in Issaquah, Washington, has remained true to Price\u2019s vision. It is still relationship-minded, and members seem satisfied, <a href=\"https:\/\/www.fool.com\/earnings\/call-transcripts\/2024\/05\/30\/costco-wholesale-cost-q3-2024-earnings-call-transc\/\">renewing at a rate of 93%<\/a>. Last quarter, the membership fees accounted for $1.12 billion, about two-thirds of Costco\u2019s <a href=\"https:\/\/www.fool.com\/earnings\/call-transcripts\/2024\/05\/30\/costco-wholesale-cost-q3-2024-earnings-call-transc\/\">$1.68 billion total net income<\/a>. The dependence, in other words, remains mutual.<\/p>\n<p>Wall Street also likes what Costco does, especially the dependable cash flow that comes from membership. Occasionally, shareholders feel neglected \u2014 in 2004, an analyst with Deutsche Bank complained that Costco was \u201c<a href=\"https:\/\/www.wsj.com\/articles\/SB108025917854365904?shareToken=st7342700bb6d3487fa992fa857dab0452\">overly generous<\/a>\u201d with its employee benefits, saying, \u201cPublic companies need to care for shareholders first.\u201d But few complain about the returns.<\/p>\n<p>\u201cI did the calculation once,\u201d Schwartz said. \u201cThe stock price has grown 17% annually since the founding.\u201d<\/p>\n<h2 class=\"wp-block-heading\" id=\"h-a-giant-ecosystem\"><b>\u2018A giant ecosystem\u2019 <\/b><\/h2>\n<p>Four thousand miles south of Anchorage, in Sugar Land, Texas, no one flies in by bush plane to shop. But in this swampy Houston suburb, life orbits around Costco just the same.<\/p>\n<p>The site of a former <a href=\"https:\/\/www.nytimes.com\/2023\/11\/08\/dining\/sugar-land-texas.html\">prison farm<\/a> for the sugar industry, Sugar Land has transformed in recent years into an interlocking complex of master-planned communities. In June, Costco opened Warehouse No. 882, its third in the area, on a prime piece of land.<\/p>\n<p>On opening day, the al-Abadi family stood at the entrance, trailed by a long line of members waiting since dawn, despite the punishing heat.<\/p>\n<p>Shariah al-Abadi, who came with a shopping list in mind (\u201cbutter, oil, the essentials\u201d) and the intention to stick to it, epitomized one type of Costco member. Her teenage daughter Fatima typified another: She was there for the possibility of surprise. For months, as the new warehouse rose from the mud, so had Fatima\u2019s anticipation. After an hour shopping in the new store, mother and daughter checked out with a cart barely containing the day\u2019s haul, including a six-foot-tall teddy bear.<\/p>\n<p>\u201cWe\u2019ll be back,\u201d sighed Shariah al-Abadi, who said she goes to Costco \u201ctwice a week. Sometimes more.\u201d<\/p>\n<p>Like Anchorage, Sugar Land is home to a rapidly growing Asian American population (largely Indian and Pakistani American in Sugar Land), which Costco is eager to serve, despite the challenge of operating across a nation of wildly varying local tastes and traditions.<\/p>\n<p>\u201cCostco knows what\u2019s going on in Texas because they have an office there,\u201d Smith said. \u201cIt\u2019s very astute. They\u2019re one of the few retailers that will allow a brand to go into just one building and test their product.\u201d<\/p>\n<p>As a result, Costco is able to pick up on trends and send intel back to Issaquah. \u201cIt\u2019s a giant ecosystem,\u201d said Smith, if also one dependent on human capital \u2014 the expertise of warehouse managers. Costco tends to promote from within, inculcating personnel with the company\u2019s idiosyncratic culture for decades, if not entire careers. Many of the company\u2019s top employees began as baggers or food handlers.<\/p>\n<p>That limited Costco\u2019s expansion in the past. For many years the company declined to open new warehouses at the rate Wall Street wanted, because of management concerns that the facilities were too challenging to operate.<\/p>\n<figure class=\"wp-block-embed is-type-video is-provider-tiktok wp-block-embed-tiktok\">\n<\/figure>\n<p>This concern seems to have waned, however. Costco now opens about 30 warehouses a year, with a growing number abroad. \u201cOverseas expansion is where the growth is coming,\u201d Susan Schwartz said. \u201cRight now they\u2019ve got seven warehouses in China. But they could have 150.\u201d<\/p>\n<p>East Asia has indeed been fertile for Costco, with openings this year in Japan (where it already has 33 warehouses), South Korea, Australia and China. That experience has yielded dividends at home. Expertise in Taiwanese and South Korean shopping preferences translated into the availability in the United States of products like braised abalone in brown sauce, giant red sea cucumber and Chinese-style bacon \u2014 and brand loyalty from Asian Americans.<\/p>\n<p>Yutack Kang, a content creator from Milpitas, California, with 463,000 TikTok followers, posts frequently about \u201csus foods at Costco you\u2019re too afraid to try.\u201d One of his <a href=\"https:\/\/www.tiktok.com\/@photogami?lang=en\">latest<\/a>: frozen durian pulp produced by Lucky Taro, a Los Angeles-based importer.<\/p>\n<p>\u201cThe Asian food selection is superb,\u201d Kang wrote in an email.<\/p>\n<h2 class=\"wp-block-heading\" id=\"h-costco-would-never\"><strong>\u2018Costco would never\u2019<\/strong><\/h2>\n<p>By and large, Americans <a href=\"https:\/\/www.pewresearch.org\/politics\/2024\/02\/01\/from-businesses-and-banks-to-colleges-and-churches-americans-views-of-u-s-institutions\/\">do not trust corporations<\/a>. But when asked which companies they do trust, they consistently rank Costco near the top.<\/p>\n<p>\u201cThey\u2019re selling the same food everyone else is selling,\u201d Smith said. \u201cIt\u2019s not like the products are magical. But they created a culture.\u201d<\/p>\n<p>Sol Price wanted Costco members to feel respected and smart. The company remains known for its no-questions-asked return policy, high-quality products and cheerful customer service. Employees are paid significantly better (an average of $26 per hour) than their counterparts at major retailers (an average $17 per hour). That helps create \u201ca stable, motivated, capable team,\u201d said Zeynep Ton, a professor at the MIT Sloan School of Management.<\/p>\n<p>Perhaps most important is Costco\u2019s abiding reputation for low prices.<\/p>\n<p>For Kirkland products, for instance, Ton said \u201cthey don\u2019t mark up anything more than 14% or 15%.\u201d This includes Costco\u2019s flagship product, the wildly popular $1.50 hot-dog-and-soda combo, which has cost the same since 1985. It\u2019s not publicly known whether the company makes money on the 200 million hot dogs it sells each year, but the pricing is widely seen as brilliant marketing.<\/p>\n<p>Another, less obvious way Costco keeps faith with its members is by not selling shelf space. \u201cMany retailers ask suppliers to pay for a position in a store,\u201d said Mark Stovin, a former Costco executive who now works for <a href=\"https:\/\/www.onshelfmarketing.com\/\">OSMG<\/a>, a leading food broker. \u201cCostco would never do that.\u201d<\/p>\n<p>Stovin said Costco also does something almost none of its competitors do: restrain itself in mining customer data. \u201cThey have a number for every member, which could be trackable, traceable, and they could certainly dive into that,\u201d Stovin said. \u201cThey really haven\u2019t.\u201d<\/p>\n<p>It appears the company may be loosening up: Costco recently announced that it would join companies with less consumer-friendly reputations such as Uber in starting a <a href=\"https:\/\/www.forbes.com\/sites\/bradadgate\/2024\/06\/12\/costco-announces-will-launch-a-retail-media-network\/\">retail media network<\/a>, serving ads to members based on their purchasing histories. (The company declined to say what platforms those ads might appear on. In a further shift, that effort will be led by an outsider, a veteran marketer from Walmart.)<\/p>\n<p>Costco remains reluctant to embrace technology \u2014 it was a latecomer to e-commerce, for instance \u2014 which may be attributable to the spirit of Price, who commanded managers to step away from their computers.<\/p>\n<p>\u201cIf you\u2019re a senior manager, your job is to interact with members,\u201d Schwartz said. \u201cThey expect senior people to be on the floor all the time.\u201d<\/p>\n<p>That ethos goes all the way to the top.<\/p>\n<p>At the Sugar Land opening, Ron Vachris, who in January became Costco\u2019s CEO, just the third in the company\u2019s 42-year history, could be seen chatting with floor personnel and inspecting the frozen tilapia. Hundreds of Costco employees, who are known for exuberant loyalty, had driven from as far away as Baton Rouge, Louisiana, to celebrate and shake hands with their new boss.<\/p>\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"2560\" height=\"1708\" src=\"https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_e9T29zEd-66c6181d484d2-scaled.jpg\" alt=\"\" class=\"wp-image-31354068\" srcset=\"https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_e9T29zEd-66c6181d484d2-scaled.jpg?width=200 200w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_e9T29zEd-66c6181d484d2-scaled.jpg?width=300 300w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_e9T29zEd-66c6181d484d2-scaled.jpg?width=400 400w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_e9T29zEd-66c6181d484d2-scaled.jpg?width=500 500w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_e9T29zEd-66c6181d484d2-scaled.jpg?width=600 600w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_e9T29zEd-66c6181d484d2-scaled.jpg?width=700 700w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_e9T29zEd-66c6181d484d2-scaled.jpg?width=800 800w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_e9T29zEd-66c6181d484d2-scaled.jpg?width=900 900w\" sizes=\"auto, (max-width: 2560px) 100vw, 2560px\"\/><figcaption class=\"wp-element-caption\">A typical Costco shopper spends $100 to $150 per visit. <em>Kerry Tasker \/ The New York Times<\/em><\/figcaption><\/figure>\n<p>Vachris, who started as a forklift operator in 1982, greeted employees and customers warmly, seemingly willing to hang out all morning. Approached by a reporter, however, he handed over his business card and retreated into a corporate cadence. (\u201cTexas has been a great state to us. We\u2019re excited to have another building here.\u201d) Subsequent requests for an interview were declined.<\/p>\n<p>Costco executives are known for avoiding the press, which contributes to the company mystique. \u201cThey have amazing discipline,\u201d Ton said. \u201cIf you go on LinkedIn, you won\u2019t find much information about their executives.\u201d And the company has no media relations office.<\/p>\n<p>Because of Costco\u2019s secrecy, judging whether the company lives up to its own professed standards can be a challenge.<\/p>\n<p>\u201cIt would be interesting to know more about how they use their data,\u201d said Raghu Iyengar, a professor of marketing at the Wharton School.<\/p>\n<p>Since almost nothing is known publicly about Costco\u2019s internal workings, he said, even its sterling reputation for low prices cannot be verified. To determine whether Costco\u2019s prices are in fact \u201cselling stuff at the lowest markup,\u201d the company would need to be less guarded.<\/p>\n<h2 class=\"wp-block-heading\" id=\"h-perception-of-value\"><strong>\u2018Perception of value\u2019<\/strong><\/h2>\n<p>Situated between a defunct strip club, Brooklyn\u2019s industrial waterfront and a raucous, sludge-oozing elevated expressway, Costco Warehouse No. 318 is low on sparkle but hums with manic energy. The Sunset Park location seems to have set aside shelf space for every immigrant group in Brooklyn. Beyond that, though, this could be a Costco anywhere. That works to Costco\u2019s advantage.<\/p>\n<p>One way the company strokes the value-driven superegos of its members is simply with the presentation of its warehouses. With their exposed wiring, minimal sunlight and nary a Spotify playlist, the warehouses are, well, warehouses, with fluorescent lighting and bad acoustics, designed to be built in a hurry. (The 3.5-acre Sugar Land building, for example, took only four months to assemble.)<\/p>\n<p>That no-frills presentation transmits a reassuring signal of benign intent: We\u2019re not trying to seduce you. Which is its own kind of come-on.<\/p>\n<p>\u201cThe customer walks in the door, and immediately there is a perception of value,\u201d said Paco Underhill, the author of \u201c<a href=\"https:\/\/www.simonandschuster.com\/books\/Why-We-Buy\/Paco-Underhill\/9781416595243\">Why We Buy: The Science of Shopping<\/a>.\u201d \u201cThe perception of value means that as someone walks in, discretionary purchases take on a different mantle than they might at Kroger, Target or Macy\u2019s. People go, \u2018I would never think about buying that. But if I did, this is the place to get it.\u2019\u201d<\/p>\n<p>For all its piety, the last thing Costco wants is for shoppers to stick to a budget. On the contrary, it wants them to return to the parking lot balancing a wobbly heap of products they had no intention of buying \u2014 a strategy known as \u201cthe Costco effect.\u201d<\/p>\n<p>\u201cYou\u2019ve heard the phrase,\u201d Vachris said on an earnings call in May. \u201cPeople come in to spend $100 and walk out with $300.\u201d<\/p>\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"2560\" height=\"1919\" src=\"https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_dET7gnzp-66c61868e08f9-scaled.jpg\" alt=\"\" class=\"wp-image-31354082\" srcset=\"https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_dET7gnzp-66c61868e08f9-scaled.jpg?width=200 200w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_dET7gnzp-66c61868e08f9-scaled.jpg?width=300 300w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_dET7gnzp-66c61868e08f9-scaled.jpg?width=400 400w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_dET7gnzp-66c61868e08f9-scaled.jpg?width=500 500w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_dET7gnzp-66c61868e08f9-scaled.jpg?width=600 600w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_dET7gnzp-66c61868e08f9-scaled.jpg?width=700 700w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_dET7gnzp-66c61868e08f9-scaled.jpg?width=800 800w, https:\/\/bdc2020.o0bc.com\/wp-content\/uploads\/2024\/08\/https___nytapi.wieck_.com_feed-photos_dET7gnzp-66c61868e08f9-scaled.jpg?width=900 900w\" sizes=\"auto, (max-width: 2560px) 100vw, 2560px\"\/><figcaption class=\"wp-element-caption\">Some Costco locations have become so popular that the company has built other nearby warehouses to relieve the crowds. <em>Kerry Tasker \/ The New York Times<\/em><\/figcaption><\/figure>\n<p>\u201cWe have created a treasure-hunt atmosphere,\u201d said Jim Sinegal, the previous Costco CEO, in an address to San Diego State University business students in 2017. \u201cWe try to create a sense of urgency, that if you see the product there, you better buy it, because chances are they won\u2019t be there next time.\u201d<\/p>\n<p>In recent years, the treasure-hunt offerings have included Burberry shoulder bags ($1,000) and bottles of Roman\u00e9e-Conti wine (a four-pack for $40,000). Last year the retailer even began offering <a href=\"https:\/\/www.nytimes.com\/2024\/04\/11\/business\/costco-gold-bars.html\">one-ounce gold bars<\/a> for about $2,000, which typically sell out within hours. (It has been estimated that Costco sells some $200 million in gold a month.)<\/p>\n<p>And this manufactured circle of desire and regret works.<\/p>\n<p>\u201cI love Costco,\u201d said Erica Rualo, a content strategist at Chase Bank, who has shopped at the Sunset Park warehouse. \u201cBut I hate the feeling of \u2018I wish I had bought that,\u2019 because now it\u2019s gone. Or \u2018I should have bought more of that.\u2019\u201d<\/p>\n<p>Strictly speaking, Costco can still answer Sol Price\u2019s question \u201cIs it really being honest with the customer?\u201d with a \u201cYes.\u201d But at this point the spirit of his edict may have been lost to its letter.<\/p>\n<p>It would be hard to argue that Costco buyers don\u2019t know what they are getting into. After all, they have to ferry the cart with the seven-foot-artificial tree, the solar panel, the steel pet coffin and the three-month supply of Belgian mini-cream puffs back to the car.<\/p>\n<p>\u201cThe idea is that you don\u2019t feel that these are temptations,\u201d said Ayelet Fishbach, a behavioral psychologist at the University of Chicago, Booth School of Business \u201cYou\u2019re getting a great deal.\u201d<\/p>\n<p>But, she added, \u201cThe question is, \u2018Do you actually need this?\u2019 You probably don\u2019t.\u201d<\/p>\n<p><em>This article originally appeared in <a href=\"https:\/\/www.nytimes.com\/2024\/08\/20\/dining\/costco.html\">The New York Times<\/a>.<\/em><\/p>\n<\/p><\/div>\n<p><script>\n\t\tvar consent=\"grant\";\n\t\t\/* The above code is parsing the JSON data from the local storage and storing it in a variable. *\/\n\t\t\t\t\tconst onetrustStorageConsent = JSON.parse(localStorage.getItem( 'consent_one_trust_bdc' ) );\n\t\t\tif ( ( onetrustStorageConsent !== null ) ) {\n\t\t\t\t\/* Checking to see if the user has consented to the use of cookies.\n\t\t\t\t* If they have not, it is deleting the cookie.\n\t\t\t\t* This will comment for now, until further notice.\n\t\t\t\t*\/\n\t\t\t\t\/\/if ( onetrustStorageConsent.C0002 === false ) {\n\t\t\t\t\/\/\tdocument.cookie=\"_fbp=;expires=Thu, 01 Jan 2010 00:00:00 UTC; path=\/; domain=.boston.com\";\n\t\t\t\t\/\/}\n\t\t\t\t\/* Checking if the user has given consent for the cookie C0002.\n\t\t\t\t* If the user has given consent, the variable consent will be set to 'grant'.\n\t\t\t\t* If the user has not given consent,the variable consent will be set to 'revoke'.\n\t\t\t\t* Documentation https:\/\/developers.facebook.com\/docs\/meta-pixel\/implementation\/gdpr\n\t\t\t\t*\/\n\t\t\t\tif ( onetrustStorageConsent.C0002 !== true ) {\n\t\t\t\t\tconsent=\"revoke\";\n\t\t\t\t}\n\t\t\t}\n\t\t\t\t!function(f,b,e,v,n,t,s)\n\t\t{if(f.fbq)return;n=f.fbq=function(){n.callMethod?\n\t\tn.callMethod.apply(n,arguments):n.queue.push(arguments)};\n\t\tif(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';\n\t\tn.queue=[];t=b.createElement(e);t.async=!0;\n\t\tt.src=v;s=b.getElementsByTagName(e)[0];\n\t\ts.parentNode.insertBefore(t,s)}(window, document,'script',\n\t\t'https:\/\/connect.facebook.net\/en_US\/fbevents.js');\n\t\tfbq('consent', consent);\n\t\tfbq('init', '989222871864976');\n\t\tfbq('track', 'PageView');\n\t<\/script><script type=\"module\">\n\t\tvar consent=\"grant\";\n\t\t\/* The above code is parsing the JSON data from the local storage and storing it in a variable. *\/\n\t\t\tconst onetrustStorageConsent = JSON.parse(localStorage.getItem( 'consent_one_trust_bdc' ) );\n\t\t\t\/* Checking to see if the user has consented to the use of cookies.\n\t\t\t* If they have not, it is deleting the cookie.\n\t\t\t* This will comment for now, until further notice.\n\t\t\t*\/\n\t\t\t\/\/if ( onetrustStorageConsent.C0002 === false ) {\n\t\t\t\/\/\tdocument.cookie=\"_fbp=;expires=Thu, 01 Jan 2010 00:00:00 UTC; path=\/; domain=.boston.com\";\n\t\t\t\/\/}\n\t\t\t\/* Checking if the user has given consent for the cookie C0002.\n\t\t\t* If the user has given consent, the variable consent will be set to 'grant'.\n\t\t\t* If the user has not given consent,the variable consent will be set to 'revoke'.\n\t\t\t* Documentation https:\/\/developers.facebook.com\/docs\/meta-pixel\/implementation\/gdpr\n\t\t\t*\/\n\t\t\tif ( ( onetrustStorageConsent !== null ) && (onetrustStorageConsent.C0002 !== true ) ) {\n\t\t\t\tconsent=\"revoke\";\n\t\t\t}\n\t\t\t\t!function(f,b,e,v,n,t,s){if(f.fbq)return;n=f.fbq=function()\n\t\t{n.callMethod? 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