What Is Costco's No. 1 Competitive Edge?
Shareholders have cheered at Costco Wholesale's (NASDAQ: COST) performance in past years. The specialty retail juggernaut has watched its stock grow 55% over a one-year span, far ahead of the S&P 500's 5% return during the same time frame. The company has performed extraordinarily well over a longer time horizon, too -- Costco shares have increased 278% in the past five years, equal to an average annualized return of 56%.
So, why has a modestly growing retail company been so successful? I would wager that it has something to do with Costco's sturdy economic moat. And although there are several amiable aspects of Costco's business, there is one particular element that takes the cake. Let's discuss Costco's top competitive edge and what it means to the company's business model.
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Source Fool.com
