Costco’s Artful Discounts is the title of the latest BusinessWeek cover story, featuring, of course, Costco. It’s a nice, positive article, that makes Costco look very dedicated to saving its customers money, even if it has to go in search of new suppliers when its vendors raise prices.
Beyond that, the article is interesting for the fact that it’s heavy on the concept that Costco attracts a high-wage customer who wants to save money on the day to day, but also looks at a Costco trip as an opportunity to buy the unexpected at an unexpected price. This is as much the reason people are willing to pay for membership (which is where Costco makes much of its profit) as the low prices on groceries. A few quotes give the story:
- The average member household makes upward of $75,000 a year.
- As QVC CEO Michael George, a longtime member, puts it: “You don’t just go there for bargains. You go there for the treasure hunt.”
- Coffee maker Starbucks (SBUX) recently agreed to sell five $20 gift cards for $79.99 at Costco this fall, a deal it doesn’t offer customers in its own cafés.