Download
HTML Embed
HTML EMBED
Click to Copy
Make Me Smart with Kai and Molly

Episode 123: Why even have a debt ceiling?

Jul 23, 2019

Latest Episodes

Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace

Deal or no deal

Jul 23, 2019
Download
HTML Embed
HTML EMBED
Click to Copy
Corner Office from Marketplace
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Download
HTML Embed
HTML EMBED
Click to Copy
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report

Will Costco lose its valuable members to Amazon Prime?

Annie Baxter Sep 29, 2016
Share Now on:
HTML EMBED:
COPY
About 75 percent of Costco's operating income is from its membership fees.
PAUL J. RICHARDS/AFP/Getty Images

Grocery retailers are dealing with big price declines in products like eggs, meat and dairy. Lower prices can mean lower sales.  

Costco, which sells a lot of groceries, isn’t immune. But it’s got a not-so-secret weapon: its membership fee, which starts at $55 a year. 

“About 75 percent of its operating income comes from the membership fee,” said Piper Jaffray analyst Sean Naughton. 

According to Naughton, in the U.S. and Canada, Costco’s membership renewal rates are north of 90 percent.

“I consider that to be a very good number,” he said.

But there’s another subscription service nipping at Costco’s heels: Amazon Prime. 

Timothy Campbell, an analyst at Kantar Retail, said Costco’s low prices had previously inoculated it against competition from Amazon. But now a growing share of Costco members are becoming Prime members. 

“So I think the question for Costco becomes, when is one membership enough?”Campbell said. “When do they need an Amazon Prime membership or a Costco membership, but not both?” 

If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air.  But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.

Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.

When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.