Costco, the warehouse-style chain store based in the United States, has attracted over 100 million members worldwide. While most consumers associate shopping at Costco with buying affordable and quality everyday items and foods, what many may not realize is that even the wealthy are fond of Costco’s competitive prices, with luxury items flying off the shelves.
The retail giant, known for its simple and enjoyable bulk shopping experience, also offers a range of luxury products. Costco Chairman Hamilton “Tony” James revealed some unexpected luxury items sold at Costco, emphasizing that “the rich love affordable things.”
James pointed out that people of all economic backgrounds seem to recognize Costco as a place to find bargains, whether it’s a $1.50 hot dog combo or a luxury car.
According to information on the Costco website, James has been a member of the company’s board of directors since 1988. He mentioned enjoying participating in board meetings as it provides an excellent window into understanding global consumer dynamics and what they are or are not buying.
From Rolex watches to gold bars, high-end products have become an essential part of Costco’s business. James stated that affluent shoppers have a particular affinity for these offerings.
In an interview with “Chief Executive” magazine, James stated, “We know that as long as the quality is good and the price is reasonable, we can sell anything in bulk.” This philosophy is part of the reason why this retail giant offers expensive products ranging from Dom Perignon champagne to 10-carat diamonds.
James noted that Costco members include not only middle-income families but also wealthy shoppers who can quickly identify a good deal, such as the Porsche on sale in a Costco sales area in Seattle.
“In a Costco warehouse in Seattle, a Porsche dealership placed their cars on the store floor, and they were sold out within a week,” James cited. “The rich love bargains.”
James also discussed the topic of Costco gold bars selling out rapidly, making headlines. “I don’t know if it’s the rich buying or those skeptical of the economy,” he said. “I’m curious to know the demographic data of the buyers.”
Introduced in August 2023, Costco gold bars sold out within hours after restocking. Analysts at Fuzu Bank stated in a report in April 2024 that Costco sells up to $200 million worth of gold bars monthly.
Over the years, high-priced items sold by Costco have included a $400,000 diamond ring, a Bugatti electric skateboard, standalone wine cellars, six-person indoor saunas, and Burberry scarves.
Costco prides itself on the “treasure hunt” shopping experience and does not sell anything indiscriminately. Unlike competitors like Amazon and Walmart, Costco carefully selects the products it sells. While large retailers like Walmart stock over 120,000 different items, Costco limits its selections to around 3,400 stock-keeping units (SKUs).
“We are not interested in just dumping products at low prices,” James emphasized. For example, Costco would rather sell a TV worth $1,000 for $500 than sell a $500 TV for $250.
“We are always striving to find better quality products, allowing members to get more value. We are by no means a dollar store. At the same time, we are constantly trying new projects, such as gas stations, major appliances, and pharmacies,” he added.
Data from consumer analysis company Numerator from last year regarding Costco’s typical customers showed that within a year leading up to June, this membership-based chain store was more favored among high-income millennial and Generation X households compared to many competitors.
Earlier this month, Costco announced that its January net retail sales were $19.51 billion, a 9.2% increase from the previous year.