Image source: Getty Images
Costco is the third largest retailer in the world, behind Walmart and Amazon. Costco has close to 120 million members, and according to the analytics firm Numerator, 37% of Americans shop at Costco. Costco is well known for its Kirkland Signature products, its $5 rotisserie chickens, and its food court menu.
Not many realize however that Costco sells more clothes than Old Navy or Neiman Marcus. Revenue growth for apparel has outpaced food and electronics at Costco. With over $7 billion in apparel sold each year, here are four reasons why Costco is also a great place to buy clothes.
1. Low cost
This one isn't a surprise. Costco sells high-quality items at a lower price than many competitors. Costco caps its profit margins at about 15%, passing the savings on to the consumers. How can Costco keep things so cheap? They have buying power, Costco can buy large quantities of clothes at a lower cost from the manufacturers compared to other retailers.
Looking for the basics? Costco's Kirkland brand of underwear, T-shirts, socks, leggings, and more can be found at a large discount. While you may not see a large variety, you get multiple quantities of the high-quality basics you need.
2. Brand-name apparel
While Costco sells its own private label Kirkland clothing line, it also offers apparel from name brands including Tommy Hilfiger, Calvin Klein, Eddie Bauer, Birkenstock, North Face, and more. As large clothing retailers close their stores, Costco is winning over brands and becoming an apparel destination.
3. Diverse clothing selection
Many people shop at Costco because they know what product they want. Costco approaches its apparel a little differently. According to Joe Feldman, a retail analyst for Telsey Advisory Group, "Costco does a good job of getting products customers want. Lucky Brand jeans happen to be in the store this week, or North Face jackets. You see people coming back for the treasure hunt."
4. Return policy
Costco has a generous return policy, even if the clothes are slightly worn. According to its website, "With few exceptions, Costco has a 100% satisfaction guarantee. Simply bring the product to any Costco warehouse and our Member Services Team will be happy to assist you. It helps if you have the receipt or original product packaging, but it may not be necessary to process your return."
Costco accepts returns from in-store and online purchases. While some items may have to be returned within 90 days, clothes are typically not in that category, giving you more flexibility. It won't, however, accept clothes that have excessive wear and tear.
Costco's success is based on membership loyalty and growth. Costco saw incredible growth in 2021, with its revenue increasing by almost one-fifth from the previous year. Costco has a devoted following who enjoy the savings and its clothes offer yet one opportunity to save.
Alert: highest cash back card we've seen now has 0% intro APR until nearly 2024
If you're using the wrong credit or debit card, it could be costing you serious money. Our expert loves this top pick, which features a 0% intro APR until nearly 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.
In fact, this card is so good that our expert even uses it personally. Click here to read our full review for free and apply in just 2 minutes.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, and Walmart Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
