| Pub. Date | : November, 2021 |
|---|---|
| Product Name | : The IUP Journal of Marketing Management |
| Product Type | : Article |
| Product Code | : IJMM211121 |
| Author Name | : Shailendra Singh Bisht and Jitesh Nair |
| Availability | : YES |
| Subject/Domain | : Marketing |
| Download Format | : PDF Format |
| No. of Pages | : 13 |
The case describes how 'Kirkland Signature,' the private label brand of Costco Wholesale Corporation (Costco), a US-based membership warehouse club, became the leading private label accounting for nearly 30% of all the private-label grocery business in the US, and how it enabled Costco, in the process, to emerge as the leading retailer in the US. Kirkland Signature, introduced in 1995, contributed to over a quarter of Costco's net sales of US$152.7 bn in 2019 and nearly 26.2% of the company's overall net sales in 2018. The case ends with a note on the future plans of Costco for the 'Kirkland Signature' product range as well as the need for it to further innovate and differentiate itself owing to the rising competition in the private label space from other retailers like Walmart and Target.
The working rule followed by Costco employees is that all Kirkland Signature products must be equal to or better than the national brands, and must offer a savings to our members.1
- Dick DiCerchio, Senior Executive Vice President - Chief Operating Officer,
Costco, in October 2009.
I don't think at the beginning of this process in the early 1990s we thought nearly a third of our business would be under this brand [Kirkland Signature].2
- Richard Galanti, Vice President and Former Chief Financial Officer,
Costco, in January 2019.
Kirkland is a brand in its own right. It is one of the reasons people go to Costco.3
- Karen Short, Retail Analyst at Barclays, in January 2019.
In 2019, Costco Wholesale Corporation (Costco), a US-based membership warehouse club,4 reported that its private label5 brand 'Kirkland Signature' (Kirkland), introduced in 1995, had contributed to over a quarter of its registered net sales6 of $152.7 bn. The private label contributed $39 bn to net sales of $149 bn in 2018 and $35 billion to the overall net sales of $138 bn in 2017.7 The Kirkland private label also accounted for nearly 30% of all the private-label grocery business in the US, according to estimates from FMI and IRI.8