Costco is an American retail warehouse club headquartered in Washington. It makes its place in the world’s top five retail store chains. Costco operates in more than 800 locations worldwide. It is not the only player in retailer chain warehousing. It faces competition from various other stores in the USA and globally. So, have a look at ‘Costco Competitors’.
Costco is ranked 5th largest retailer in the USA according to the reports of the National Retail Federation. It has over 500 stores in the American Market. The others in this list are the major competitors of the warehousing retail store. Walmart, Amazon, Kroger, Home Depot, Walgreen, Target, etc., are the biggest competitors of Costco in the US market.
A glance into Costco Wholesale
Costco Wholesale Corporation is the major discount retail store in America. It was founded in 1983, and as of 2020, it has earned annual revenue of 166.76 billion. It works on a membership-based discount model. As a wholesale retailer, it sells merchandise at a discounted price to members only. This policy has worked best for Costco as compared to other retailers like Sam’s Club, which has the same policy.
Costco’s strength is its coverage and control over the retail market. Over the years, it has also grown a trusted customer base. However, its limited range of merchandise and profit margin due to the low price is a drawback that benefits the competitors. Now, let us put a glance over Costco’s major competitors in the USA-
Major Competitors of Costco
Walmart Inc.
Walmart is the largest retail store in the world. It is a discount departmental store founded in 1962. Headquartered in the USA, it operates in 24 countries of the world. Walmart has 10,000+ stores globally. It also owns Sam’s Club retail warehouse. Walmart earned a revenue of $559.2 billion in 2020, leaving its competitors far behind. It also operates by different names in other countries. Its business includes warehousing, e-commerce, hypermarket, discount stores, etc.
Amazon
Amazon is the largest e-commerce firm that operates globally. It is the second-largest retail store in the USA and the whole world. Founded by Jeff Bezos in 1994, Amazon is headquartered in Washington. Apart from e-commerce it also operates in AI, digital streaming, and cloud computing. In 2020, Amazon’s total revenue was US$386.064. Over the years it has emerged as the most trusted e-commerce globally. Costco faces huge competition from Amazon in the USA and the global market.
The Kroger Company
Kroger is the biggest competitor of Costco after Walmart. The Kroger Company operates in 35 states of America. It operates as supermarkets, hypermarkets, and departmental stores in these states. Kroger also owns 700+ jewelry stores in the USA. It is also the second-largest supermarket retail chain in the USA. As of 2020, it earned US$132.5 billion in revenues. By revenue, it is USA’s second-largest retail chain after Walmart.
Kroger does not operate overseas. But it is direct home competition for Costco. Kroger’s innovations and self-developed products are the biggest threat to Costco.
The Home Depot
Home Depot is a home improvement store chain headquartered in Atlanta. Other than the USA, it also operates in Canada and Mexico. Home Depot has more than 2000 stores in the USA, Canada, and Mexico. Its revenue in 2020 was $110.2 billion. Whereas, the net income it earned in 2020 was $12.8 billion.
The global pandemic has come as an opportunity for Home Depot. As people are living more in their homes, they are investing in home improvement items. Home Depot’s Speciality in home improvement items is a threat for Costco. Additionally, it has also earned the image of the best home improvement retail store chain in the USA.
Target
National Retail Federation (NRF) has put Target retail chain at number seven, below Costco in the list of top retailers of the USA. Target is a big-box departmental store. It earned a revenue of US$99.6 billion in 2020. It has around 2000 stores in USA and Canada. Target is not overshaded Costco yet, but it has shown terrific growth over the years. Target believes in high-quality products. As a discount store, it has created a loyal customer base in past years. Its growing popularity could be a threat to Costco in the future.
Conclusion
Costco is a very trusted retail store chain in the US market. However, in the international market, it still needs to work harder. In the home market also, competition is growing hard for Costco. Retailers like Walmart and Amazon are continuously growing globally to defeat each other in the race. Kroger has already achieved tremendous success in the home market. And now Target is also growing fast. Amid hundreds of retailers, these firms are Costco’s major competitors.
FAQs
- What are the major competitors of Costco in the Global Market?
Answer: At the global level, Costco has competition from retailers like Aldi, Alibaba, Schwarz Group, Ahold Delhaize, etc.
- What is Costco’s global ranking in terms of sales?
Answer: Costco is the world’s second-largest retailer in terms of sales. Walmart tops this list. In 2020 Costco made sales of $163.2 billion worldwide.
