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Non-Tech : Costco, slow but sure? -- Ignore unavailable to you. Want to Upgrade?

To: Clay Takaya who wrote (736)	9/28/1998 12:32:00 PM
From: Zakrosian	Read Replies (1) \| Respond to of 1147

Clay - You bring up some excellent points - your supermarket overview is right on the money (I too worked in the grocery business, though from the supplier side, so I know how important the potential margins of new products is). The question is whether or not Costco's operations are that similar to a grocery chain. My impression has been that Costco sells products on very thin margins across the board; the entire inventory is in effect like a loss leader (or at least cost neutral), and their profit comes from the membership fees. The impact of a recession will be interesting. It might very well spur an increase in membership. Will their high price items slow down in sales or will they actually increase? After all, sales of computers, 35 inch TV's, digital cameras, etc. won't come to a complete halt during tough economic times. Perhaps Costco will see a greater market share of those items as purchasers become more price-conscious. And if they do slow down, I have confidence that Costco's management is astute enough to alter their product mix to ensure ongoing profitability. I guess those are the types of questions that make investment decisions so stimulating.