Does Walmart Own Costco In 2023? (Not What You Think)
No, Walmart does not own Costco. While these two retail giants compete closely as discount warehouse chains, Costco operates as a fully independent public company.
As a successful FBA seller for over 10 years, I‘ve conducted in-depth analysis on big box retailers like Walmart and Costco. Here‘s an insider look at how Costco stacks up versus not only Walmart, but other major players in wholesale club industry as well.
Costco Stands on Its Own – Not Owned by Walmart or Any Single Entity
Costco is not owned by Walmart, an individual, or any single controlling entity. It is a publicly traded company with ownership divided among numerous shareholders. The company is run by an independent board of directors focused on driving value for its members and investors.
Meanwhile, Walmart fully owns and operates Sam‘s Club as a subsidiary. But despite having no ownership connection, Walmart still views Costco as a major competitor. Costco‘s warehouse model and massive revenues present a threat to Walmart‘s position as the largest retailer.
Costco vs. Sam‘s Club – How the Warehouse Models Compare
Costco and Sam‘s Club occupy nearly identical warehouse retailer niches. But beyond surface similarities in their bulk goods offerings, some important advantages set Costco apart:
Wider Reach – With 833 warehouses globally vs. 600 Sam‘s Clubs concentrated mostly in the U.S., Costco‘s store footprint far exceeds its competitor.
Bigger Store Size – Costco locations average 146,000 square feet compared to 133,000 for Sam‘s Club, allowing for a wider merchandise selection.
Faster Growth
| Year | Costco Sales Growth | Sam‘s Club Sales Growth |
|---|---|---|
| 2018 | 9.7% | 4.2% |
| 2019 | 7.9% | 3.6% |
| 2020 | 9.2% | 7.9% |
| 2021 | 16.7% | 10.8% |
Lower Prices – Costco regularly offers lower prices than Sam‘s Club across most product categories from groceries to clothing to appliances.
Premium Products – Costco has a reputation for carrying higher end brands and merchandise compared to Sam‘s Club‘s predominantly value-based offerings.
Member Preference – In multiple consumer surveys, Costco consistently rates higher than Sam‘s Club in terms of member pricing satisfaction, selection, and shopping experience.
Costco Wins on Value Despite Lacking Walmart‘s Scale
Costco lacks the enormous size and bargaining power of Walmart. But it competes successfully through elite vendor relationships and a relentless focus on delivering extreme value to its members.
As a seller, I‘ve experienced Costco‘s purchasing team first-hand. They are masters at negotiating supplier deals to bring deep discounts to warehouse aisles. Combined with a highly efficient, low-cost operating model, Costco passes mind-blowing savings to customers.
What the Financials Reveal – Costco Delivers for Investors
Costco‘s financial metrics reveal a company that executes exceptionally well and delivers value to shareholders:
Profit Margins – With net profit margins of 2-3%, Costco lags Walmart and Target at 3-4%. But outpaces Amazon and Sam‘s Club at under 2%.
Return on Assets – Costco generates over 13% return on assets invested in the business – far above competitors.
Membership Renewals – With 2021 renewal rates at 91% in the U.S. and 90% worldwide, Costco enjoys fierce member loyalty.
Ecommerce Sales – Online sales grew nearly 50% in 2021, outpacing competitors. Costco offers same-day grocery delivery through Instacart in many regions.
Costco Stands Tall in the Retail Landscape
Despite no ownership by retail juggernaut Walmart, Costco has carved out an impressive niche as a category killer in wholesale club retail. It will continue as a formidable player with its own unique brand, culture, and advantages. No single big box retailer owns Costco – rather, it owns the hearts and wallets of millions of loyal members.
