Off the Press

June 29, 2010

Warren Kagarise Press Reporter

Go bargain hunting with a Costco newbie

Costco Wholesale spends nothing on advertising and lacks a public relations team, but the Issaquah-based retail Goliath generates buzz aplenty.

Costco instead relies on customers — and the occasional endorsement from the queen of all media — to build business.

Take, for instance, the televised trip talk titan Oprah Winfrey took to Costco in 2004. The company paid nothing for the national exposure afforded to Kirkland Signature chicken potpie and cashmere sweaters.

Such Costco lore — the stealth marketing strategy, the casual corporate culture, the bargains and, of course, the bulk — had long fascinated me, even though I had never set foot inside a Costco.

For a piece in the summertime Issaquah Living magazine inside this newspaper, I set out to chronicle how Costco continued to thrive and expand despite the recession. So, as I reported the piece, I ducked inside the flagship Issaquah warehouse with a card-carrying member.

I received no Oprah-style red carpet treatment — although, to be fair, I had not alerted Costco execs to my arrival — but I left impressed. Not just by the sheer amounts, but also by the niceties scattered throughout the warehouse — decent wines, designer jeans and the like. Read more

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Costco plans bargains in bulk from modest Issaquah headquarters

June 29, 2010

Every trip through a cavernous Costco Wholesale warehouse feels like a treasure hunt.

The company brings Dom Pérignon and Bud Light, platinum-set diamonds and scoopable cat litter, Prada handbags and Michelin tires together under the same flat roof.

Costco members line up to check out with carts full of their purchases at the flagship Issaquah warehouse. By Greg Farrar

The quest has been carefully designed for shoppers — 57.4 million Costco members worldwide. Shoppers must traverse vast retail plains and scan the jungle of exposed metal shelves for bargains in order to find loot — discounted Ugg boots, say, or smoked salmon.

Inside the Issaquah warehouse, customers hunt for deals in a retail ecosystem spread across 155,000 square feet. Costco cachet knows no class, no income. Part of the appeal, executives and industry watchers said, stems from the treasure hunt concept. Shoppers return to Costco for basics, yes, but also for the thrill of a surprise bargain.

“No matter what level of economic strata you are, you like good stuff,” company Chief Financial Officer Richard Galanti said. “Now, sometimes you have to choose to buy the chicken versus the steak, but the fact is, we’ve got some great stuff.”

The philosophy has made the Issaquah-based company the third largest retailer in the United States, the eighth largest on the planet and No. 25 on the Fortune 500.

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