3 Compelling Costco Growth Drivers You Might Not Know About
Written by Jennifer Saibil for The Motley Fool -> Costco just launched executive memberships in China. Online registrations are attracting younger members. Costco Wholesale (NASDAQ: COST) has a dependable business model that offers high value for members in exchange for an ann
Costco Wholesale (NASDAQ: COST) has a dependable business model that offers high value for members in exchange for an annual fee. It tends to be inflation-resistant, since it offers rock-bottom prices on products, generating even higher volume and sales as prices begin to rise. In fact, while most companies tout wide gross margins, Costco aims for razor-thin margins. The lower the price, the greater the chance of boosting loyalty and volume, while the company benefits from membership fees that go straight to the bottom line.
Low prices are always in demand, but Costco has three new growth drivers you may not know about that are adding momentum.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Executive members have long been a growth driver for Costco. This membership costs double the standard membership of $65 in the U.S., and members get perks like cashback and special shopping hours. Executive membership grows every quarter, adding new revenue to the total.
In the 2026 fiscal third quarter (ended May 10), executive members increased 9.6% from last year to 41.2 million. This group is highly loyal, accounting for about half of paid memberships but 75% of total sales.
Costco launched executive memberships in China in Q3, and management says it had "seen a higher level of activity than we had initially expected." Costco launched in China in 2019, and it has seven warehouses there. The region remains a massive long-term opportunity.
Costco has moved into e-commerce , but its model doesn't work with e-commerce in quite the same way as a traditional retailer. It doesn't ship products, but it has other digital services, like in-store pickup and partnerships with third-party delivery companies.
One of its more recent digital options is online registration. This opens it up to a wider audience of potential members, and specifically a younger one. Management has said that the average member age is lower due to online signups, which means these members can stay with Costco even longer.
