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1 day agoFrom Warehouse Powerhouse to Blue Chip: Why Costco Could Be Next for the Dow
Costco's strong fundamentals and high share price make it a strong candidate for inclusion in the Dow Jones Industrial Average.
In 2014, Meredith and Robert Bonilla proved that it is possible to get married inside a Costco. After meeting in Costco's freezer section, the Bonillas later received permission from headquarters and hosted a ceremony with around 200 guests.
Costco was founded in the 1980s, and it's been changing shoppers' lives ever since. Every day, millions of Americans flock to the warehouse chain to take advantage of its low prices, free samples, range of goods, and, of course, its food court. This warehouse store is so beloved, it even has its own league of superfans: There are actually people out there with Costco tattoos. One even has Kirkland Signature inked on his arm.
Going to the grocery store can be a wonderful time, but it can also be overwhelming and financially draining. This is also how I feel about technology; I sometimes love it, and sometimes I feel like it came into this world specifically to cause frustration. However, sometimes your grocery shopping experience and your electronic devices can work together in harmony. How are those two things related, you ask? Thanks to a program at Costco, you can easily turn your unwanted electronic devices into money
Ultimately, there's not one easy answer; which warehouse club is best for you really just depends on how often you shop, what extra services you want to use, and what you tend to buy from these clubs. But by taking a closer look at the specifics, you might get a better sense of which membership will get you more of what you're looking for.
With members sticking around for the excellent value proposition as well as the $1.50 hot dog combo, it's clear that Costco has pretty much perfected the in-store experience at this point. The 90% renewal rate might just be the floor as the firm opens new stores across the globe while doubling down on e-commerce, perhaps there's room to bump up that renewal rate further.
Costco's Auto Program should be as popular as its $5 rotisserie chicken - but I've learned not too many of its members actually know it exists. I discovered the program this past summer during a Costco grocery run when a pamphlet caught my eye as I was leaving. At the time, I was in the market for a car but putting it off because I didn't want to deal with persistent salespeople or lose a day haggling at a dealership.
Sometimes, change can be a good thing, but customers have ended up downright angry with quite a few changes Costco has made over the years. Sometimes, change is inevitable. However, the problem comes when the change makes the overall experience or product worse rather than better or just different. While sometimes the changes haven't been something the company had any control over, like being forced to switch manufacturers, other times, the changes have just missed the mark from the customers' point of view.
Costco sells its products with very little markup, choosing instead to make most of its money from membership sales. This business model makes sense: The better deals it has, the more likely people are to want a membership. Memberships at Costco are booming. In the fiscal first quarter of 2026, overall memberships were up 5% year over year to 146 million. And its higher-priced executive memberships were up a stronger 9%.
There are many reasons to love Costco. Their bakery is always pumping out new, delicious treats - like this new ridiculously delicious triple chocolate loaf - you can always try plenty of yummy samples, and their bulk pricing system seriously cannot be beat. But one complaint many Costco shoppers agree on is the warehouse's signage, or lack thereof. Someone else wrote that this design takes you on "a magical mystery tour of things you don't need but suddenly want." Many agreed.
Costco says unique items continue to play a role in generating excitement for its members. The $150K diamond and the Babe Ruth baseball are not serious revenue drivers. They are conversation starters. They are the reason a member tells their neighbor, 'You will not believe what I saw at Costco this weekend.' That word-of-mouth is priceless, and it keeps the renewal flywheel spinning.
Costco ( NASDAQ:COST ) had a tough 2025, with its stock declining 6% while the S&P 500 gained 16%, marking a rare significant underperformance for the warehouse retailer. In 2026, however, trends have shifted. Year to date, the benchmark index has gained just 0.5%, but Costco shares have risen over 13%. Now, the warehouse retailer just reported robust January sales of $21.33 billion, up 9.3% year-over-year, supported by a 7.1% increase in comparable sales over the first four weeks of the new year.
One of Costco's biggest ways to save doesn't involve setting foot inside a warehouse. The wholesale club has been selling gasoline since 1995, and many US warehouses now have pumps for members to top up. The company is even set to open its first-ever stand-alone gas station in California this year. The savings make gasoline one of the biggest ways shoppers say their annual membership fee basically pays for itself.
Consumers seldom skip wholesale shopping opportunities that offer good deals on brand names and discounted bulk prices. Of course, it helps that stores like Costco consistently deliver that experience - and then some. Its warehouses have become destinations in and of themselves for the variety of affordable products, and while its customers enjoy the personalized attention they receive from its well-informed and obliging employees, not all branches are uniform.
Costco Wholesale Corp ( NASDAQ:COST) just reported something remarkable: a 92.3% renewal rate in the US and Canada, with 89.8% worldwide. That's not just a metric. It's the entire business model distilled into two numbers. Most retailers live and die by comparable sales or margin expansion. Costco's stickiness lives in membership renewal. When nine out of ten customers voluntarily write another check each year, you've built something Amazon.com Inc ( NASDAQ:AMZN) and Walmart Inc ( NYSE:WMT) can't easily replicate.
It can be difficult to decide between the three major warehouse club chains: BJ's Wholesale Club, Costco, and Sam's Club. For many shoppers, the decision is already made based on convenience - whichever store is closest to you is the one you're likely to subscribe to. But if you're lucky enough to have access to all three, you may find yourself spoiled for choice.
I've shopped at Costco for over 10 years, so I know a lot of the rookie mistakes to avoid. Knowing how to read the chain's price tags can help you make smarter purchasing decisions. Costco often has great deals on restaurant gift-card packs and its house-label products.
First, we asked fuel market analyst Patrick De Haan at GasBuddy, an app that finds deals, how many gallons the typical American driver buys in a year. He said 600, which works out to roughly 40 purchases of 15 gallons each. We then identified 13 Costco warehouses in metro areas that cover the continental US and compared their gas station prices to GasBuddy's average price for those local markets on the same day.
The warehouse retailer won't accept returns on beer, wine, or spirits "where prohibited by law," according to their official policy. This catches plenty of shoppers by surprise, especially those buying in bulk for occasions like weddings or big parties, only to realize a bit too late that they bought more than they needed. Reddit is full of stories from frustrated couples who discovered this too late. One California bride bought cases of beer and wine for her wedding, only to have staff turn her husband away at returns when guests drank less than expected.