Industry Overview• Annual Revenue 462 Billion

• 2009-14 Growth: 3.5%

• 2014-19 Growth Projection: 2.1%• Costco/Wal-Mart: account

for over 82% of market share

Industry Performance•Key External Drivers• Per Capita Disposable

Income• Corporate Profit• Time spent on Leisure &

Sports• Product Offerings

• Kirkland Brand

Industry Performance, Cont’d

Key External Drivers (Cont’d)

• Competition• World Price of Crude Oil• Costco Gas

• Time spent on Leisure & Sports

Costco-Company Overview• 451 Warehouses• 67 Million Members• Inventory: 3,600 items/store• 2014: 79 Billion in Revenue (6.9% Increase)

Strengths• Pricing Authority• Consistently provide

competitive price• Gasoline • Lower cost, brings members

to warehouses• Brand Loyalty• High quality products• Market share growth• Increased customer base

Weaknesses• Geographic Dependence• U.S. & Canada: 87% of total

Sales in 2014• California: 32% of U.S. sales

• Older Customer Base• Baby Boomers• Growing older, spending less

Opportunities• Attract Younger Customers• 19-34 Demographic• E-Commerce• Google Express & InstaCart• Higher quality apparel• Organic foods

Threats• Competition• Highly Competitive• Sam’s• BJ’s

• Non-Member Retailers•Wal-Mart• Target

• Internet Retail• Amazon

Company Analysis• Business Strategy• Lower In-Store Inventory• Focus on Higher End Goods• Slow Expansion

• Historical Value• Stock Price (as of 4/24/15:

$148.12• 1 year growth: 32.52%• 5 year growth: 146.04%