🔒 Inside Costco: How an airplane hangar store transformed into a bulk-buying destination

Here’s what to know about the company through the years

FILE - In this March 20, 2020 file photo, shoppers line up to enter a Costco store in Tacoma, Wash. Americans are beginning to see the first economic impact payments hit their bank accounts this week. The IRS tweeted Saturday, April 11, 2020, that it had begun depositing funds into taxpayers bank accounts and would be working to get them out as fast as it can. (AP Photo/Ted S. Warren, Fle) (Ted S. Warren, Copyright 2020 The Associated Press. All rights reserved.)

HOUSTON – Have you ever wondered how Costco came into our lives?

Take a look into the history of Costco, the company’s buying practices, and the benefits offered to employees within the company.

From airplane hangar to bulk-buying destination

Costco was established in 1976 under the name “Price Club” by entrepreneur Sol Price at a converted airplane hangar in central San Diego, California, originally serving area small businesses, according to its website. But business was slow, and later began to serve very few non-business customers.

Jim Sinegal, executive vice president of merchandising, distribution, and marketing fine-tuned the company’s strategies and helped transform Price Club into a company changing the world of retail.

Seven years later, the first Costco warehouse was opened in 1983 in Seattle, co-founded by Sinegal and Tacoma-based attorney Jeff Brotman, with the company becoming the first to go from zero to billions in sales.

In 1993, Price merged both Price Club and Costco, operating under the name “PriceCostco,” opening over 200 locations nationwide. By 1997, Price kept the Costco name for all locations.

In a news release from Costco in 2000, the company opened its first two warehouses in Fort Worth and East Plano in September 2000. Costco made a landing at two Houston-area locations in Spring of 2001, although the release did not specifically say which locations.

Buying practices

In an interview with former Costco buyer Martin Dubreuli on “In Practise,” the company’s buying structure is split to two segments: national and regional buying. Most products found on the West Coast are normally not found on the East Coast, because customer tastes differ. Dubreuli added that there are many local suppliers that Costco purchases supply from.

When asked about profitability and price increases, Dubreuli said retailers maximize their products by bringing new items and extracting more money from suppliers.

“At Costco, even if my price is the cheapest, if I get a cost decrease from a supplier, I will go even deeper than that,” he told “In Practise.” “Customers buy tons of products at that price, so if I can go lower than that, I will.”

Costco manages less than 4,000 SKUs (stock-keeping units) with one-third of them being food. In an article from ThomasNet.com, that is more than 6,000 SKUs fewer than big-box retailers.

Employment and benefits

Nearly 300,000 people work at Costco worldwide, including retail, warehouse, and distribution sites.

According to the company website, Costco provides benefits such as affordable health care coverage for full-time and part-time employees along with retirement savings, bonuses twice yearly for long-tenured employees, and paid sick leave and vacation time.

Costco claims that its vacation and leave policies “are very competitive by retail standards.”

During the COVID-19 pandemic, Costco offered pay raises to employees and additional paid time off to parents with children who attended school or daycare.

In addition to employee benefits, Costco offers growth opportunities to employees who are seeking a managerial or supervisory position.

Aside from that, Costco warehouses are closed on the following federal holidays: New Year’s Day, Easter, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.

Houston-area Costco locations:

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About the Author:

A graduate of the University of Houston-Downtown, Ana moved to H-Town from sunny southern California in 2015. In 2020, she joined the KPRC 2 digital team as an intern. Ana is a self-proclaimed coffee connoisseur, a catmom of 3, and an aquarium enthusiast. In her spare time, she's an avid video gamer and loves to travel.