Membership sales and retention drive Costco‘s business and the chain has succeeded in creating a very loyal membership base.
“Who we found is the best at customer loyalty is Costco, which may not be surprising,” UBS Analyst Michael Lasser told CNBC.
Costco, he noted, excels at value and convenience. Lasser called traffic the best way to judge retail loyalty.
That’s a metric Costo has done well with.
“Over the past two years, Costco has made several moves that risked upsetting its famously loyal customer base – including raising membership fees in September 2024 and restricting food court access to members only. But visit data suggests that, rather than deterring shoppers, these changes have supported rising engagement and a broadening customer base,” according to data from Placer.AI.
The chain, however, has grown its foot traffic.
“Costco entered 2026 with solid visit momentum. Both total and same-store visits posted healthy year-over-year gains through the back half of 2025 and into January,” added Placer.AI.
It’s a level of success that has actually caused another problem for the warehouse club — overloading its stores — which the chain has taken a number of steps to address.
Costco makes real changes
Costco has taken some key steps to spread out the traffic at its stores to keep the shopping experience positive for members. The first involves making simple changes designed to spread out traffic.
That’s something CFO Gary Millerchip spoke about during the chain’s third-quarter earnings call.
“I do think there is a lot of work that we have done over recent quarters to create more opportunity for members to visit more frequently, whether it was the extended hours for our gas stations, before the recent growth in gas that we have seen with higher prices,” he said.
In addition to extended gas station hours, Costco also has opened its warehouses earlier exclusively for Executive members.
Costco has also invested in improving its existing warehouses so they can serve more members.
“So far this year, we have also completed two relocations with one more planned in Q4 as we continue to relocate select high-volume warehouses to larger locations with more parking and expanded gas stations to provide a better member experience and drive more volumes in these warehouses,” CEO Ron Vachris said during the call.
Related: History of Costco: Company timeline and facts
Costco keeps adding warehouses
As Americans continue to prioritize value amid concerns about household budgets, Costco has become a primary grocery destination for a surprising share of shoppers.
“A recent survey found that 15% of Americans ages 18 to 24 and 17% of Americans ages 25 to 34 do most of their grocery shopping at Costco. That share declines among older generations — 9% of those ages 35 to 44 do their grocery shopping at Costco, 3% of those ages 45 to 54 prefer Costco for groceries, and 6% of those 55 and older shop for groceries at Costco,” according to GOBankingRates.
Costco, Vachris shared during the Q3 earnings continues to build new warehouses, often to take stress off of existing locations.
“We target 30-plus net new openings per year in the coming years. In the quarter, we opened four net new warehouses, including three in the U.S., and one additional Canadian business center. Those openings brought our total warehouse count to 928 worldwide,” he said.
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Former CFO Ron Galanti talked about how the chain picks new locations during its first-quarter 2024 earnings call.
“I don’t have the numbers in front of me, but I know, in fiscal ’23, we had something like 25 or so locations that did over 400 million, and another 160 or so that did 300 million to 400 million. Those are huge numbers. And certainly, as we get to 350-plus…when it starts having a three in front of it, certainly at $350 million, we want to start looking to see what we can do to cannibalize it, frankly, and to have more growth in that market,” he shared.
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Costco moves have a big impact
Costco typically relocates four-to-six locations each year and the impact of that on sales is meaningful.
“When we do these, we normally are moving a building that is underserving the market and goes into a larger facility [with] better parking. [We can see] extreme 50%, 60% increases when you add a gas station and really add a lot of parking to a 20% uplift to a building that had everything [and] just got into a better facility,” Vachris said during the chain’s first-quarter earnings call.
Kenneth Schuckman operates Schuckman Realty, a full-service commercial real estate services firm serving New York City, Long Island, and the surrounding tri-state area and New Jersey. He shared some insights on how Costco picks new locations.
“CEO Ron Vachris calls the approach strategic cannibalization. The idea is simple: build new warehouses near overburdened locations to redistribute customer volume and improve the shopping experience. These in-fill locations allow customers to spend less time battling for parking spaces or waiting in long lines, which in turn encourages more frequent visits and higher spending,” he shared on his website.
Analysts support Costco’s moves
Gary Sankary, a retail veteran with 50 years of experience, sees little reason to question anything Costco does.
“Costco has been incredibly successful, and not by accident. They place their stores in markets where they are likely to succeed. This means the market has the right population density, the right economic and competitive profile, and can be efficiently supported by their supply chain,” he posted on RetailWire.
At the same time, analysts note opportunities for improvement.
“Costco can improve in areas like collect from store, checking what’s in stock at the warehouse, and making the ecommerce process easier,” GlobalData Managing Director Neil Saunders posted on RetailWire.
In addition to adding warehouses and relocating others, Costco has also made investments in faster checkout, digital membership cards, and other technology that improves the member experience.
Dominick Miserandino, CEO of RTMNexus, told TheStreet that Costco has a very simple motive with its tech investments.
“Costco isn’t digitizing for buzz. Its digital and in-store tech is translating directly to faster service and stronger member engagement,” he shared.
The warehouse club continues to report strong membership gains and renewal rates.
“We ended the quarter with 82.9 million total paid members, up 4.1% versus last year, and a 149 million cardholders, up 4% year over year. In terms of renewal rates, at Q3 end, our U.S. and Canada renewal rate was 92.2%,” Millerchip said during the Q3 call.
