Description: Although Costco operates over 580 warehouse stores throughout North America, their location strategy remains relatively unexamined in the economic geography literature. A cursory examination of Costco’s network makes it clear that the firm chooses to locate primarily in the suburbs of major cities, where income levels are somewhat higher than the national average. However, what is not clear is the extent to which other demographic and geographic factors adequately account for Costco’s store locations, and what strategy underlies the geography of the firm’s warehouse stores, especially in relation to its distribution network. This research studies Costco in order to decode the location strategies that have guided the company’s North American and international expansions. The investigation attempts to identify key elements of Costco’s multinational retail network, including this network’s evolution over time. This paper seeks to benefit both retail business and public policymakers by highlighting elements of Costco’s location strategy that have contributed to the firm’s success.
Date: December 2015
Creator: Testa, Peter