How Will Costco Weather the Downturn?
Costco Wholesale (NASDAQ: COST) attracted shoppers during the coronavirus pandemic because its warehouses remained open (albeit with shorter hours and special accommodations) and sold everyday merchandise like toilet paper, paper towels, and food at attractive prices.
The key to Costco's success is its annual membership fee that allows shoppers to buy merchandise at low prices. The trick is that it sells many items in bulk, so it can keep unit prices down. The total price is often higher than at other retailers, though. For instance, discount retailers and dollar stores provide lower absolute prices, so consumers pay less at the cash register for the item at these retailers.
Costco has had a lot of past success, but can it continue in the current tough economic climate?
Source Fool.com
