Buying in bulk is about having the ability to both afford next week’s food this week and have the means to store it. Not to mention the annual subscription.

Responding to a comment about dollar stores preying on the poor with, “that’s why I shop at Costco” is… a choice.

The fact that the strategic wedge with which a successful, relatively socially-positive business manages to sustain itself isn't universally accessible doesn't negate its value.

The Venn diagram between people who shop at dollar stores and people who shop at Costco isn't empty.

This is true, but a valuable - and damning - observation that this variation in business model, that seems to be both decent and profitable, is so rare

For me it's very simple: What I save on glasses pays for my membership. I don't go all that often but it's still worthwhile.

... and a car to haul all that stuff, and time to drive to the nearest Costco.

It really is a luxury that a ton of people can't afford.

Indeed. And I say this as Costco member. There are lot of factors that make Costco memberships work. And a lot of people won't be able to make much benefit out of Costco membership.

I say this as someone who admires their business model and how they treat customers & employees: your typical Costco experience is drive to the suburbs, spend $500 and load up your car with nice to have food products and discretionary purchases. Poorer people cannot do any of these things.

Why is car a luxury? A clunker car worth $2000 will still work fine for years with minor maintenance that can be done by yourself.

Oh, yeah. Cities. Cars are expensive when you live in a 100 sq. ft. box.

Perhaps that's what is causing problems?

A competently planned city makes car ownership unnecessary.

The cost of the car itself is minimal compared to insurance, gas and storage costs.

>While other retailers try to get me to buy more stuffs, Costco try to make sure I'm satisfied enough that I'll renew my yearly membership (their main profit source). The incentive structure aligns very well.

This doesn't make any sense. Costco makes a profit on the goods sold as well. They have every incentive to sell you as much stuff as possible. That's why they also engage in the usual retail tactics to increase sales, like having the essentials all the way in the back of the store, and putting the high margin items (electronics and jewelry) in the front. They might practice a more cuddlier form of capitalism than dollar general, but they're still a for profit retail business.

I see you're not terribly familiar with Costco. Membership fees account for the vast majority of net operating income for Costco and they keep markups on items at no more than 14% over cost (15% for Kirkland brand).

So yes, Costco does make most of its profit by ensuring customers are happy and continue to renew their memberships every year.

>Membership fees account for the vast majority of net operating income for Costco

This is financially illiterate because you're mixing revenue ("membership fees") with profit ("net operating income"). While it might be tempting to assume that membership fees is pure profit for them, it's not, because people only buy memberships because they're useful for something (ie. shopping at their stores). Therefore you can't strip that out from the other costs associated with operating a chain of warehouses.

It’s kind of a meme; Costco’s profits are almost exactly the same as their total revenue from membership fees, which leads people to think that the warehouses run at zero margin and the fees are their only profit source. The fees certainly give them room to run the sales at extremely low margins (though large grocers like Kroger only have something like 3% margins), but it wouldn’t take a huge shift in purchasing patterns to change this coincidence. If all the people who don’t use their membership that much dropped them and those who use them were all large-scale buyers, they would have to increase their prices just to give themselves a bit of cushion.

It seems to amount to a similar principle, that their business model depends on repeat customers, and would fail if they lost trust.

I much prefer this to stores that are happy to burn customers, never expecting to see them again.

>It seems to amount to a similar principle, that their business model depends on repeat customers, and would fail if they lost trust.

You think dollar general is making $37.9B (in 2023) of annual revenue from one-off customers? Unless you're operating a tourist trap, or some sort of business that people only need a few times in their lifetimes (eg. real estate agents), most businesses rely on repeat customers.

Dollar stores around here pop up in small towns, killing off any locally-owned competition, and are far enough away from the big chains to mean they can charge quite a bit more while offering terrible service.

Note how they tend to have captive customers.

Counter example: they sell their dollar hotdog and pop right at the front!