What this means, say its customers, is that shopping at Costco is fun. Dallas retail consultant Tracey Altman has as little success sticking to her shopping list as the average customer, even though she knows the tactics Costco uses to induce her to buy. Besides, Costco is one of the few stores where her husband likes to shop. During a recent excursion, she says with a laugh, he had to be restrained from buying a $10,000 flat screen television priced at $2,000.
"One of the things that impresses me most about Costco," says Altman, "is that it did change from a toilet paper destination to a place where people go regularly not just to buy toilet paper, but to see what else is there. So I can buy my box of Tide and spend less for it than elsewhere, while my husband can look at the flat screen TVs."
KEEPING THE BUZZ
This is not to say Costco is perfect. Sighing, Sinegal recites a long list of mistakes, including too-rapid expansion in the Midwest and Southeast, where the company eventually closed some of the stores. The company's smaller margins, meanwhile, give it little room for error - which Wall Street reminds Costco of regularly. Its stock was at $32 a share in summer 2003, well off its $60 high in 2000, despite little debt, steady earnings and sales growth, and adoring customers.
And no company that competes with Wal-Mart is ever free from worry.
"Competition is a fact of life," says Sinegal. "It's painful, and everyone who has it would just as soon not have any. But the other truth is that, without competition, you're in big trouble. You get complacent, and the one thing we don't want to be is complacent."
Not that any of its customers believe that's possible.
"You name it, they have it," says Cherie Lydick from Florida. "If I want a national brand, it's there. The price they have is always going to be the best price, and I don't even have to check about the price. I know it's going to be the best price."