I saw the newsflashes this afternoon about how Costco had just had a stellar November and beat analyst expectations. This despite their decision to stay closed on Thanksgiving day and bucking the trend established by their competition. Bravo, Costco; I’m glad to be a shareholder and a part of your ‘extended’ family.
Costco came to the Des Moines metro about ten years ago, opening its warehouse in the newest commercial district around the Jordan Creek mall. My dad, a retired worker keeping himself busy working at a local grocer decided to give employment there a try. I remember his interview process well, and he was hired as temporary staff over the holidays. Each time we spoke that winter, I heard things from him about this employer that were different than any other in his prior life. He had spent a majority of his life working at the US Embassy in New Delhi, India and had risen from a low wage job to a fairly critical position. Once retired, he came to Iowa and has lived and worked here ever since. Despite his experiences working for the embassy, the benefits, the management style, and the work ethic expected and developed seemed remarkable.
I had just read Jim Collins’ book, Good to Great, (G2G) and kept hearing things about Costco from my dad that sounded eerily like those of “great” companies in Collins’ research. So, like I had invested in most of the G2G companies, I bought Costco stock over the next several months. All in all, I dollar cost averaged my purchases over a six month period. My cost basis for these purchases amounts to about $46 a share.
As dad’s employment continued and age happened, I continued to marvel at how the company worked with him – accommodating his age, restrictions, style, idiosyncrasies and all. I had to assume this was the norm – and saw this in employees’ faces at each shopping trip. I held onto the stock.
Costco sells higher-end merchandise than the normal grocer or home improvement store. I like to refer to Costco as the ‘bulk Target’. Sort of like Sams Club being the bulk Walmart. I’ve enjoyed their Kirkland branded beer, milk, vodka, breads, coffee and much more. A weekly trip is norm for me, and the adage that Costco has a ‘minimum $100 spend’ holds true for me – not because they force it, but because I can usually fill most of my grocery items there. At a great price. With traffic increasing per their annual reports, I held onto the stock.
It was encouraging to see that Costco retained its policy of putting employees first this Thanksgiving. When the doorbusters and Thursday sales were driving America’s craziness, not only did Costco remain closed, it didn’t seem to put notices up about being closed. There were no apologies masked as notices from Costco. It was closed so employees could stay with their families.
I am glad they did… sales up. Customers up. Volume up. Stock up.