Few retailers encourage buyer loyalty fairly like Costco.
The warehouse membership has constructed its popularity on low costs, treasure-hunt procuring, beneficiant return insurance policies, and a gentle stream of unique merchandise underneath its well-liked Kirkland Signature personal label.
Members willingly pay annual charges for entry to the chain’s warehouses, and many consumers view a Costco membership as an important family expense.
That loyalty continues to indicate up within the firm’s monetary outcomes.
In its third quarter 2026 earnings report, Costco stated membership payment earnings climbed 10.7% 12 months over 12 months to $1.37 billion. The corporate additionally reported a U.S. and Canada membership renewal fee of 92.2%, whereas its worldwide renewal fee remained a sturdy 89.7%.
These numbers spotlight simply how happy most members stay with the Costco expertise.
However even Costco has a weak spot.
A rising variety of members say some of the irritating components of procuring at Costco is not the crowded parking heaps or lengthy checkout strains. It is discovering out that an merchandise they need is immediately unavailable.
The one factor Costco would not all the time get proper
Out-of-stock merchandise have turn into a serious supply of frustration for consumers throughout retail. And Costco seems to be one of many chains mostly related to the issue.
Costco ranked among the many retailers customers most ceaselessly complained about for out-of-stock objects in the latest Stockout Stigma Index from supply-chain software program firm DOSS.
Associated: Costco makes a good larger guess on its home model
The survey additionally highlighted different main retailers, together with Sephora, Dealer Joe’s, and Goal.
Whereas stockouts are an issue all through retail, they might be particularly damaging for Costco due to its membership-based enterprise mannequin.
At Costco particularly, members are paying for entry to merchandise and bargains they cannot essentially get elsewhere. When members make a particular journey to a warehouse solely to find a favourite merchandise is gone, the frustration can really feel better than it could at a standard retailer.
Retail specialists have lengthy warned that poor inventory availability can damage buyer satisfaction and even erode loyalty over time. Customers who repeatedly encounter empty cabinets could select to purchase elsewhere or substitute competing merchandise.
For Costco, that is a notable problem as a result of recurring membership charges are one of many firm’s most necessary revenue drivers. Sustaining member satisfaction is important to sustaining these sturdy renewal charges.
Costco’s stock technique creates points
Paradoxically, a few of Costco’s stock points stem from the identical technique that helps make the retailer profitable.
