American brand stores are more inclined towards the addition of large chain corporations, just like the biggest rivalries in the market- Target and Costco. While there are a few speculations that the Target corporation holds the ownership of Costco, we’ll learn about these in the later section but at first, let us understand the business model revolving around both- Target and Costco.
Ranked eighth biggest retailer in America, the Target Corporation is one of the best-known chain retail store operators. Inaugurated in the year 1902 the Target store was founded by George Dayton and John Geisse. The Target corporation is owned by Dayton-Hudson Corporation which is now renamed The Target Corporation. The company was ranked 37 on the Fortune 500 list under the heading of “largest corporate retail store in the USA”. Currently, Target operates 1844 stores throughout the USA. Target mainly focuses on medium-sized stores unlike Walmart and works on objectives to provide products at maximum discounts to the consumer. The Target business model operates less on direct-bottom line savings which provides a net profit margin of almost 10 years.
The brand is traded as a public company. Mostly deals with health and beauty products, furniture, lawn or garden supplies, bedding, clothing for kids, men, women, teenagers. The target also deals with small appliances, pet supplies, games and toys, jewellery of all kinds, small to large electronics.
The retail store is divided into two formats namely- discount store target and hyper store super target. Discount store target works mainly to carter maximum discount at products to a customer. This is possible when the items are accepted in bulks which cut down maximum charges. Now Hyper store super target relies on a box store format which has both a supermarket as well as a departmental store. This provides customers with other dynamics to choose from grocery lines to general merchandise.
Now let’s list down the subsidiaries owned by Target:
· Target Brands, Inc.,
· Target Capital Corporation,
· Target Enterprise, Inc.,
· Target General Merchandise, Inc
Costco Wholesale Corporation is a multinational corporation running throughout the USA since July 10, 1976. With its headquarters situated at Issaquah, Washington Costco is a big box retail store that is open only to members of the warehouse club. This deliberately means that members pay a certain amount to enter the membership club to access low-cost products. People who aren’t members of the Costco warehouse club are not allowed to buy any product from the store.
Costco is traded as a public company under the heading of the retail industry. It is active in 13 countries including China, Japan, Mexico, Taiwan. Costco is ranked 10 on the Fortune 500 ranking. It’s often suggested that Costco has one of the best business models in our space. The success is also unified because of its membership model, low price and high-quality products which attract the major population. It has a limited selection area with motivated proactive employees.
Costco mainly trades in providing fresh edibles and large appliances at a very discounted rate. Many of its warehouses also constitute pharmacies, optometry, vision stores, and gas stations. Costco is owned by Brotman and James D. Sinegal. In the year of 1983, the Price company merged with Costco and was renamed Costco Companies, Inc.
Below is a list of subsidiaries owned by Costco:
· Costco Canada Holdings, Inc
· Costco Wholesale membership, Inc
· Costco Wholesale United Kingdom’s Ltd
· PriceCostco International Ltd
Does Target own Costco?
Now coming back to the question, the straight answer is NO. Costco is owned by Costco Companies Inc and Target is owned by the Target Corporation. Both are independent and publicly traded companies. Target trades under the New York Stock Exchange with TGT as a symbol whereas Costco trades with COST as a symbol under NASDAQ. If in any case, Target owned Costco Company it would be traded under the parent company symbol that is TGT.
Even though the companies investing in both through a stock exchange or mutual funds are the same target, they have no control over Costco. Major companies holding the largest share of Target and Costco are:
- Vanguard Total Stock Market Index Fund
- Vanguard 500 Index Fund
- Government Pension Fund
- SPDR S&P 500 ETF Trust
- Fidelity 500 Index Fund
Target and Costco are some of the most renowned retail stores in the USA. Even though they work under different labels and have a completely different business model there are rumours about Costco being under the Target corporation.
Costco holds a large fan base in the USA and the other 12 countries. It works on a membership-only model while the target is an open store where anyone can shop over. Both the companies are competing with each other to provide low cost but high-quality products to their target audience. Costco exclusively owns the Kirkland brand and is an owner of Ancillary Businesses which mainly deals with travel and tourism, pharmacy, optical aid and hearing aid. It also operates gasoline stations.
Target does not own Costco and both are independent companies.