Costco CEO says 1 item is more important than everything else sold in the store
Costco memberships cost $60 or $120, and last year the company had 128 million cardholders
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Costco Wholesale’s deals on hot dogs, gasoline, and thousands of bulk items may seem like the best the chain has to offer, but according to the company’s CEO, one item sold trumps everything else inside the big box in terms of value.
"The most important item we sell is the membership card," Costco CEO Ron Vachris told Fortune during an interview last month. "Everything we do supports that transaction."
Costco offers two types of memberships: Executive and Gold Star.
The Gold Star membership is $60 annually and allows members to shop online and in warehouses, includes two membership cards and comes with a guarantee that allows members to cancel their membership for a refund if they are dissatisfied at any time.
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A shopper displays her Costco Wholesale membership card as she enters a Costco Wholesale store March 8, 2002, in Niles, IL. (Tim Boyle/Getty Image / Getty Images)
But the real savings come with the Executive membership, which costs $120 per year.
With an Executive membership, members get all the benefits of a gold membership, plus additional benefits and discounts on Costco services.
On top of that, members get an annual 2% reward of up to $1,000 that can be used on eligible Costco and Costco travel purchases.
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Costco CEO Ron Vachris said the real "gold" is in the membership. (Eric Thayer/Getty Images / Getty Images)
For instance, if a member spends $300 per month on household essentials like groceries, apparel and paper products; $1,000 per year on appliances and electronics; $300 on furniture and bedding; and $600 per year on auto, travel and lifestyle, they could get about $110 back from Costco, according to a calculator on the company’s website.
All members also get daily deals like the wholesale club’s popular $1.50 hot dog and drink combo.
With so many products in stock, picking the item with the most value may seem difficult, though Vachris’ experience with the company makes him one of the best to take on such a task.
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Prepared food for sale at a Costco store in Teterboro, New Jersey, US, on Wednesday, Feb. 28, 2024. Costco Wholesale Corp. is scheduled to release earnings figures on March 7. (Stephanie Keith/Bloomberg via Getty Images / Getty Images)
Vachris is the third CEO to hold the title of CEO at Costco, within the company’s 41 years of operation, having reportedly started out as a 17-year-old forklift driver for Price Club, which ultimately merged with Costco.
According to the company’s site, Vachris is a Costco veteran who, during his over 40 years of service to the company, served in every major role related to Costco’s business operations and merchandising activities. Before being tapped to serve as CEO, he served as Costco's president and chief operating officer from February 2022.
He took over as CEO on Jan. 1, 2024, replacing Craig Jelinek.
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Fox News Digital has reached out to Costco for comment, but did not immediately hear back.
Costco’s most recent annual report showed membership grew to nearly 128 million last year, with a 90% renewal rate. The revenue from membership fees last year increased by 8%, bringing the total to $4.6billion.