Costco Private Brand Sales Reach 28% (2024)

FAQs

What is the Costco private label strategy? ›

Manufacturers benefit from the volume and scale that Costco orders bring. In return, Costco benefits from quality products under its private label, often at a better price. This relationship ensures both parties are vested in each other's success, resulting in superior products at competitive prices.

Kirkland-brand items generated $56 billion in revenue for Costco last fiscal year, or 23% of its business. If Kirkland were a standalone company, this level of sales would make it larger than Nike, Coca-Cola, and United Airlines. If you include Kirkland gasoline, you can add another $24 billion to the sales total.

If you've ever shopped at Costco, you've likely purchased something from its premium in-house brand, Kirkland Signature, which has become a household name and a great way to save money.

Kirkland Signature is Costco's private label brand, featured on a wide array of products sold across Costco's warehouses and its website. Launched in 1995, the brand takes its name from the original location of Costco's corporate headquarters in Kirkland, Washington.

Kirkland Signature is Costco's proprietary trademark for its house brand merchandise. The name comes from the location of Costco's original headquarters in Kirkland, Washington. This brand is used only on merchandise sold at Costco stores or through its web sites. You can't get anything with that label anywhere else.

Kirkland Signature means quality and value. Designed with the maker in mind. Quality innovation for your bath, kitchen & more.

The company's first location, opened in 1976 under the Price Club name, was in a converted airplane hangar on Morena Boulevard in San Diego. Originally serving only small businesses, the company found it could achieve far greater buying clout by also serving a selected audience of non-business members.

Costco and Sam's Club have very similar business models. Costco is a publicly traded company, while Sam's Club is a subsidiary of Walmart. Costco's membership fees are more expensive and the prices of basic products at Sam's Club are generally cheaper.

It's been confirmed that Kirkland coffee is produced by Starbucks, the much-loved Seattle-based giant. This is no big secret, since Kirkland coffee bags have been marked with the words "custom-roasted by Starbucks" and the signature logo — at least until recently.

That's what Costco buyer Mark Klauber and his team were searching for when they collaborated with Westland Milk Products in Hokitika, New Zealand, to create Kirkland Signature™ Grass-Fed Butter, launched in 2021.

Does Walmart own Kirkland? ›

If you're a frequent Costco shopper, you're probably familiar with the Kirkland brand or have at least seen its products featured on the shelves. Kirkland is a private-label brand, exclusively sold at Costco warehouse stores.

After lots of legal back-and-forth, a location in northwest Fresno will be replaced by a "massive 219,000-square-foot warehouse," according to Amanda Bartlett at SF Gate. Currently, the largest Costco store as of now is in Salt Lake City and sits at 250,000 square feet.

Kirkland Signature Diapers are made by the same company that makes Huggies diapers, so perhaps it's no surprise that they're a close runner-up in this testing panel. While they're not identical, they seem quite similar in fit.

In addition to offering name-brand goods at bulk prices, Costco has its own in-house brand—which usually signals even more savings to be had. But Kirkland Signature isn't just popular because of the affordable deals. It's considered a premium in-house brand, with more than 350 products at a high-quality caliber.

Duracell batteries: In a 2016 interview with Atlanta station WSB-TV, Costco CEO Craig Jelinek revealed that Duracell is the manufacturer of Kirkland Signature Batteries.

Low prices, high quality

Costco's strategy of stocking high-quality items, which are sold in bulk-size at low-profit margins entices their target customers to become Costco members and to buy more products during their shopping trip.

What is private label? Private label refers to a product manufactured by one company and sold under another company's brand name. Retailers often use private-labeling to offer exclusive items, expand their catalogs, and undercut competitor pricing.

In 1995, Costco took all its private label products and gave them a single brand name: Kirkland Signature. The name came from the company's original Washington State headquarters. While Costco had recently moved to Issaquah, Sinegal said, “Nobody could spell Issaquah, so we kept it.”

By offering products in larger quantities, Costco ensures that the per-unit cost is significantly lower, which translates to more savings for the consumer. This approach aligns with the current consumption trends, where customers are increasingly looking for value in their purchases.