New York residents David and Susan Schwartz love shopping at Costco Wholesale. So much, in fact, that the couple wrote The Joy of Costco: A Treasure Hunt From A to Z, extolling the Issaquah-based warehouse company’s virtues. The 272-page book — published by, appropriately, Hot Dog Press — is also full of tips for shopping at the warehouse giant, making it a handy guide for those tackling their holiday shopping at Costco this season.

Here is an excerpt as it appears in the book.

Our New York City apartment is only 450 square feet, so we don’t have a lot of room for storage. Still, whenever we travel, we always visit the local Costco and can’t resist bringing things back with us. As we go to press in May 2023, there are over 850 Costco warehouses worldwide and we have been to over 200 of them. There are four US states without a single Costco warehouse: Maine, Rhode Island, West Virginia, and Wyoming. We plan to visit at least one Costco warehouse in every other state in the Union that has one (plus Washington, D.C., and Puerto Rico) and at least one Costco warehouse in thirteen other countries: Australia, Canada, China, France, Iceland, Japan, Mexico, New Zealand, South Korea, Spain, Sweden, Taiwan, and the United Kingdom.

A Brief History

That first Costco warehouse was almost a catastrophe. Soon after they signed the lease, Jim and Jeff were informed by the city that the 4th Avenue South Bridge, the main artery linking the warehouse district to the city, would be closed indefinitely for repairs. Worse yet, the date set for closure was five days before the warehouse was scheduled to open. Jim pleaded with the city planners, but the best they could offer was a two-week window before work would begin, because there’d been a delay in the arrival of the building supplies.

In a stroke of very bad luck for the city, but very good luck for Costco, the lights ordered for the bridge turned out to interfere with air traffic coming into nearby Boeing Field, so the city had to order new ones, delaying the bridge closure for an additional two months. By the time the bridge eventually closed, Costco shoppers were willing to take any route necessary to get to the warehouse. Costco’s founders were always cognizant of and grateful for the role that luck played in the company’s success. Jim and Jeff were always aware of the role luck played in Costco’s success.

Costco’s Food Court

Around 1984, Costco and Price Club both began selling hot dogs. At one point, Costco’s Food Court was called Café 150, in honor of the iconic $1.50 hot dog-and-soda combo; Price Club’s snack bar was called the Pizza Kitchen, although hot dogs were also sold. After the Costco/Price Club merger in 1994, the Food Court was born. In 2018, Costco Food Courts sold 377 million items in 164 million separate transactions, for a weekly average of $36,000 per location.

As of 2022, there were over 1,000 items with the Kirkland Signature brand name and sales were  greater than Campbell’s Soup, Kellogg’s, and Hershey brands combined.

A food court ‘save story’

Costco employees are always on the lookout for ways to save money, known as a “save story.” One of the best examples was bringing hot dog manufacturing in-house, which enabled Costco to maintain the $1.50 pricing on the hot dog/soda combo. Another example was the switch to concentrated pizza sauce, which saved $2.2 million per year in shipping costs (9.3 million fewer pounds to ship). In an operation that uses 1.6 million pounds of ketchup per year, seemingly small changes can mean big savings — like a change to a higher quality, larger, “Texas” hot dog roll, which saves $95,000 per year.

In 2018, Costco tested point-of-sales kiosks at four Food Court locations: Covington, Wash; Tucson, Arizona; and Pacoima and Tustin, Calif. Members select and pay for food at the kiosk, then wait in line to pick up, which speeds customer throughput considerably. The technology was an immediate success, bumping Food Court sales by as much as 10% overnight. Kiosks are now in use throughout most of the US and overseas.

Typical workday

At 6 a.m., the first two employees arrive, print production logs, and begin the day’s prep by restocking pizza boxes and other materials. At 8 a.m., a third employee joins them, and the prep continues: folding pizza boxes, and prepping pizza dough and chicken bakes. Warehouse doors open for business and the crowd begins to rush in. Costco estimates that one-third of members who visit a warehouse make a purchase at a Food Court. After lunch, the morning crew winds down and the relief crew preps for the dinner rush, thawing and proofing more pizza dough. When the warehouse closes, a 4–5 person crew cleans up and closes.

Kirkland Signature

In the early years, Costco used different brand names for various products — Simply Soda, Clout Detergent, Nutra Nuggets Dog Food — which Jim Sinegal later described as “forgettable.” By the early 1990s, Jim felt that pricing increases for brand name products “created an umbrella” under which Costco could launch a unified private label brand. In 1995, further encouraged by high-quality private label activity in the UK (e.g., Marks & Spencer, Sainsbury), Jim, with Jeff Brotman, launched Kirkland Signature, a line of private label goods as good as or better than national brands, at lower prices. Consolidating under one brand name would build loyalty, reduce consumer confusion, and save money on legal fees for trademarking.

The Joy of Costco’s book cover.

Photo courtesy of Hot Dog Press

Management initially wanted to use “Seattle Signature,” but the name was unavailable. Costco was originally headquartered in the Seattle suburb of Kirkland, so they used “Kirkland Signature.” Bob Craves, a founding officer, sketched the logo on a napkin at dinner one evening with Jim Sinegal. When the company later moved to nearby Issaquah, they decided not to change the name — in part because it’s more difficult to spell!

As of 2022, there were over 1,000 items with the Kirkland Signature brand name and sales were greater than Campbell’s Soup, Kellogg’s, and Hershey brands combined. Two of Costco’s top-selling KS products — bath tissue and paper towels — each generate over $1 billion in sales annually. The first KS product was vitamins, which was an immediate success. Now, everything from nuts to paper products, from wine to hot dogs — even golf balls — are offered under the Kirkland Signature brand.