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Gravitec 2013

Gravitec 2013. Top 10 US Retailers (USD, Billions). Source: Kantar Retail research and analysis. Note: US only, includes online and membership fee income. CLUB Business Model. Plus membership fees. Club Industry. U.S. Sales in Billions . Market Positions of Rivals. Pricesmart Inc. P.

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Gravitec 2013

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  1. Gravitec 2013

  2. Top 10 US Retailers (USD, Billions) Source: Kantar Retail research and analysis Note: US only, includes online and membership fee income

  3. CLUB Business Model Plus membership fees

  4. Club Industry U.S. Sales in Billions

  5. Market Positions of Rivals Pricesmart Inc. P Higher Sam’sClub Costco Operating Margin BJ’s Lower Few Many Number of Locations Note: Circles are drawn roughly proportional to the sizes of the club chains based on revenue

  6. Club Store Keys to Success • New / Treasure hunt • No- frills warehouse • Members (segment) • Efficiency at pallet level/ cross-docking • Goal: 3 month slot then change • Disruptive pricing • Internet sales • Value drives member renewal

  7. Map 448 locations: 41 U.S. States 85 locations: Canadian 32 locations: 18 Mexican states 23 locations: United Kingdom9 locations: Taiwan9 locations: Korea13 locations: Japan3 locations: Australia

  8. Store Count

  9. Store Count Growth United States International

  10. Sales (millions)

  11. Weekly Sales Per Store (millions)

  12. Annual Sales Per Square Foot

  13. SG&A

  14. GM

  15. EBITDA

  16. Comparable Store Sales Growth

  17. Costco Shoppers Percent of U.S. Households Shopped Costco: 18% *Read as: 58% of Costco shoppers also shop at Walmart Note: Bolding/highlighting indicates a significant difference between column percentages (95% confidence level) *Read as: 16% of Costco shoppers also shop at Sam’s Club Source: Kantar Retail ShopperScape®, July-September 2012

  18. Membership (How) • 67 million card holders • 37 million households • Gold Star Member = $ 55 • Business Member = $ 55 • Executive Member = $ 110 • Membership fees allow Costco to maintain low margins

  19. (Millions) 80% Gold 20% Business

  20. Costco • Customer Facts- • Yearly Shopping Frequency 11.7 • $ spent per trip $101.54 • Miscellaneous Facts- • Average size per unit 141,000 sqft • Average SKUs 3,700-4,500

  21. Customers in Taiwan

  22. SWOT Analysis W Strengths • Low Prices • Strong Brand • Operating Efficiency • Exceptional Workforce • Strong membership Weaknesses • Burden of high wages paid to worker • Low price margins • E-commerce activities • Small Marketing budget • Aging clientle Opportunities • Appeal to conscientious shopper • Expand into foreign stable markets • Mergers & Acquisitions • Massive supplier pool Threats • Aggressive price competition by rivals • Political complications in foreign markets • Cannibalization S O T

  23. Life Cycle – Maturity Stage • Costco is in the mature stage ?

  24. Average Sales by Opening Year (in $millions) Open Year Calendar Year

  25. Conclusions • Overall, Costco is doing great!

  26. Modeling Discussion& Questions?

  27. Costco Club Research • Data Sources • Costco’s Annual Report & 10K • Kantar Research • A.C. Nielson • Slide Share • Supermarket News • Retail Analysis • CNBC Rob Barker 704 603 7773

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