I love Costco, truly. I love the lack of mental noise I feel when I browse the aisles. I love the selection of goods and pricing leverage they have on manufacturers and their competitors.
However, Costco's technology is woefully inadequate for a wholesaler of their size. I've even heard this from Costco employees dealing with their employees portal (shout to /r/costco). Lack of sufficient tech is a systemic issue with them.
How is it possible that they cannot give me an accurate inventory of the items in the stores near me? Sometimes I see a product on social media and think "Hey it would be great to know if that product is only offered in Southwest US Costcos. Even trying to find a map of the store and where the products are kept (when there is some flux) is troublesome (yes, I get it's the "Ikea" method of needing to push you through the entire store).
The number of very large retailers who can't give accurate inventory counts is hilariously high. Even the ones that do try fail spectacularly, in all directions - I've found that when you see "limited stock" or "none available" you have a chance of finding anywhere from -5 to 50 items. And yes, that means sometimes you will carry an item into the store and it will mystically disappear.
Saying you have a few and then have none, is kinda expected and not really annoying.
Having it say you have none, and then you go to the store anyway to get an alternate and you find what you originally wanted sitting on the shelf, that's annoying.
Probably not as big as you’d think. I’d say “high confidence” is a good enough bar for this feature vs. perfection. I’ve never been upset when Target says 1 in stock but the aisle is empty - that’s just the reality of it. If the app has more, I’m usually going to be able to get one.
Whatever Target,l and Home Depot are doing works like 99% of the time for me.
From my observations of working in retail, a lot of people will just blatantly walk out with things knowing the average employee can't touch them. People that steal from stores as a career do not care in the slightest. They're confident in their craft, knowing employees are watching and aware of them. They just walk on out.
The average teenager that just steals because they think being a klepto is cool would probably be deterred by the door watchers though, yeah.
But working in retail, probably a factor bigger than shrinkage is just people picking things up, and throwing it at the back of a shelf in a different aisle. Either they're saving it for a return visit, or they don't want it anymore and are too lazy to bring it back to its shelf.
These are just my observations. I think we're down a rabbit hole of assuming the problem anyway. The main problem with Costco is probably just that they don't have a system for counting individual items, since most things in the store are just wheeled out on pallets and dropped somewhere.
Orrrrr, one of the reasons Costco is able to pay its employees better than industry standard is because they don't have a system for counting individual items that requires a significantly larger number of employees.
Yes this is by design. The company is being reimbursed through insurance or given a tax write-off[1] for documented stolen items. As long as they are showing that they put reasonable efforts in to deter theft. This could be a loss prevention department, the electronic sensors, locked cabinets, storing items at the very top of shelving units. The risk of law suits, employee injury or death, bad PR, etc is much more costly than documenting some stolen items.
The big push of retailers closing stores due to theft is an exaggeration when in mosts cases its just reduced in-store traffic and online ordering which doesn't require the stores to be as big for holding as much inventory.[2][3]
Most of the major retailers stats are old and if the numbers were really of concern I'm sure they would release the data but my assumption is their complaint doesn't seem as reactionary when you compare it to their profits. I cite this generic article as an example[4]. It appears to want you to think that theft is such a major part of the retailers problem but no specifics provided with phrasing like "has historically been" or $400 million in theft when the company has made $109 billion with 3% growth[5].
Thanks for the additional information but to be clear I wasn’t arguing that shrinkage effects a store’s bottom line much, or that employees should be able to tackle thefts in progress. I was arguing that people probably do still steal from Costco and that it could be a factor that makes it difficult to keep accurate stock counts at times. And then went on to say there are probably other, larger factors.
Isn't Walmart known for having the best inventory system? Like real time global data, so they know that someone in Thailand bought some strawberry pop-tarts 5 seconds ago.
I agree, but the fact is probably that they don't want you to know. They want you to have to show up and end up buying stuff. They also continually rearrange their stores for no apparent reason, so you're wandering around looking for the same item you bought two weeks ago.
I like Costco, but have considered abandoning it because I'm sick of staple items I've bought for years there just... disappearing. You drive over there and start scouring the aisles for, say, brown rice. NOPE. They just don't have it anymore. And in many cases it's KIRKLAND products.
I understand that a supply of something might temporarily dry up, but then I wish Costco would replace it with the same thing from another supplier at full price if need be. Then at least I can get my shopping done without driving all over town. If I'm going to have to do that, screw it; I'll just go to the regular grocery store.
Costco staples aren't necessarily your staples; there are certain products that Costco has continually had in stock for more than the 20+ years I've been wandering the aisles in search of the Arc of the Covenant (I'm certain it's somewhere in there).
But other things that look like stapes can come and go, some seasonally, some after a few years.
Costco is a very "go first" store - you go there, get what you can, and then flesh everything else out at some other store that will keep things in stock even when they get pricey.
Costco is also not the cheapest, not by far, but they are the most consistent.
Butter and soda are two of the most noticeable for me, you can easily beat Costco on both, butter because local producers often supply local stores cheaper, and soda because it's a loss-leader in many places. There are others, find them!
Look up "staple foods" and it will be a rare list that doesn't START with (let alone doesn't contain) rice. But that was just one example of something that Costco sold for years, and then didn't have for years. They may have it again now, but I've given up wasting time looking for it there and now buy it at an Oriental-foods market.
I don't go to Costco "first" in most cases because trips there are far less frequent than regular grocery-store trips. I keep a separate shopping list for Costco, which includes the core items I've been buying there for years. When the list gets long enough, I make a special trip to Costco to restock. That's why it's infuriating to find that a bunch of the items have suddenly disappeared.
I will say that what remains on my list has been pretty steadily available for some time now, with occasional outages. There are quite a few Kirkland products on there. Their peanuts (in the white-labeled metal cylinder) are outstanding, for example.
Butter might be one of the best examples since it's one of the best things to buy in bulk to save on costs, and folks who cook use an epic amount of it.
I used very little butter living alone and not cooking more than an average American, if not substantially less. I then got married and now have a family where we are cooking at minimum one meal per night, including some baking.
I'd be surprised if we didn't go through 4lbs of butter per week on average at this point. We typically sub butter in for most oils, as those oils were subbed into recipes during the anti-fat crusades a few decades ago. When you do this your consumption increases even further.
If you tend to not cook yourself or avoid animal fats like the majority of people I could see butter usage not being that high.
Butter also freezes indefinitely, so having less than 90 day supply on hand (12lbs or so) just seems irresponsible to both my family and society as a whole. Keeping even just 30 day stores of staple products seems to be a thing of the past in the US, but I feel it's setting us up for tears.
Edit: Others have already said it, but Costco is actually fairly bad in general for commodity items like butter or rice where you don't care about brand. You will likely find far better deals on "generic butter" at your local restaurant supply store, or even just regular sales at your local supermarket. Ethnic stores for things like bulk rice will almost always be substantially cheaper as well. Costco is rarely the cheapest unit cost, but it wins on convenience.
Where Costco shines are the few specialty items they run through way more volume than most such as imported Kerrygold butter and that sort of "upscale" branded items. Their white label booze is also substantially cheaper for better than average quality as well.
>If you tend to not cook yourself or avoid animal fats like the majority of people I could see butter usage not being that high.
Yeah, I guess that's the rub for me. I will generally use olive/vegetable oil whenever possible and I don't cook to the extent where I have a bunch of unavoidable butter recipe's to begin with. I keep a small bin as a general "just in case" measure but I sometimes don't even go through that.
Also only have a small freezer, so the thought of freezing butter simply never occured to me.
What? Butter is one of the main things I get from Costco. It actually is cheaper than my normal grocery store in that case (I agree with the earlier post in the thread that Costco isn’t always the cheapest.)
I love butter. Especially the Irish butter that just tastes so much better than "normal" butter. Either butter is significantly cheaper at Costco than our grocery stores. I buy like 10lbs and it lasts a few months of cooking etc.
KIRKLAND is Costco's brand, it's a white label of a consistent reliable product. Your favorite brown rice brand could've ended up appearing as a kirkland product.
I'm surprised at the shortage of brown rice though, last time I went into Costco I was amazed at the sheer number of gluten free, keto friendly, organic friendly etc products.
Not brown rice, but I guess there is a shortage and now hoarding of rice happening[1]. India has supposedly banned the export of non-basmati white rice.
I guess this could impact brown rice supplies if people who can't get white rice switch to brown rice.
Not too hard to hoard rice. It doesn't require refrigeration and can be stored for a long time. Like toilet paper!
Its a wholesale club. Replacing an item at full price would be the complete opposite purpose of the store and membership. Its not about the available supply of a product, its about Costco using its purchasing power to buy the product at a cheaper rate in bulk. If the supplier changes the price that item it has to be re-evaluated.[1][2]
"If Costco feels the wholesale price of any individual product is too high, they will refuse to stock the product. For example, in November 2009, Costco announced that it would stop selling Coca-Cola products because the soft-drink maker refused to lower its wholesale prices.[96] Costco resumed selling Coca-Cola products the following month.[1]"
If you want brown rice in bulk for cheap, have you considered immigrant stores? I ask because I used to go to Makro (the Central European membership-based wholesale chain) for rice, but then I learned that shops serving Indian Subcontinent and Vietnamese diasporas offered rice and other nice things in bulk for prices comparable to that mainstream wholesaler.
Kirkland-brand stuff is generally relabeled products from various manufacturers, and usually picked from top-tier stuff; while the details are usually kept quiet, people have matched up 1-to-1 equivalents with other, more expensive products.
I would venture the reasoning for this is that the system that handles inventory was never designed with external customers in mind. Most inventory tracking is done at the register/PoS when the purchase is made. The inventory is automatically tallied all day long as items are purchased and returned. At the end of the day a manifest is built and sent out for the next delivery truck. These systems, at least when I dealt with them, were mostly managed by IBM AS/400's which weren't built with the Internet in mind. The physical inventory is a financial/accounting compliance item to reconcile what the system thinks it has and what is in the store, related to insurance coverage.
Costco tends to order items at wholesale while the price is advantageous in order to pass on the savings which means items aren't going to be located in the same area thus no real need for a map. I would venture since freezers and bakeries are permanent fixtures along with the long-term regular items they purchase it gives the "illusion" that things are kept in specific locations. I don't know how much stock I would put in the idea of the "Ikea" method for Costco as they have returns, membership, pharmacy, eye glasses, and the food court all relatively towards the front which are areas that people come to Costco frequently for. If it was the "Ikea method" they would all be in the back of the store.
> I don't know how much stock I would put in the idea of the "Ikea" method for Costco as they have returns, membership, pharmacy, eye glasses, and the food court all relatively towards the front which are areas that people come to Costco frequently for. If it was the "Ikea method" they would all be in the back of the store.
Do people really go to those parts of the store often? The fridges with fresh food, rotisserie chicken, and items like laundry soap and toilet paper are all the way at the back, which typically are the bulk of my cart. The stuff that's close to the door is typically TVs, vitamins, and toothpaste.
I'm sure there are a few different store layout concepts over time. However you don't need a membership at Costco to eat at the food court or use the pharmacy, purchase alcohol in some states so if we applied the "Ikea" model those would be in the back to have someone "see" all the things they are missing by not being a member. For the paper towels, toilet paper, drinks they are probably regularly stocked items which if you were unloading tucks full of them you wouldn't want to be moving huge quantities all the way to the front of the store. Lastly, i'm sure its also a combination of flow control. Get everyone to the back of the store then filter toward the front building some buffers in line queue volume and getting bunched up in one single area. If you walk in the door and thats where the paper towels, toilet paper, milk, etc is then just getting in the store would be a problem.
All speculation of course, but to me the "Ikea" model didn't seem to fit.
They’ve wasted about ~$100M and three years to build an iPad KYC membership app to replace some of the AS/400 functions. It still hasn’t launched because it’s a fuck up from database to client. Until they hire from outside, their IT will always be shitty.
> How is it possible that they cannot give me an accurate inventory of the items in the stores near me?
It's absolutely intentional. It means you have to browse the store. And if something piques your interest -- you know you can't wait to buy it "next time" since it might not be there.
Costco has been trying to get adoption of their online selling platform, but their lack of real-time inventory is a massive impediment. I tried to use it a couple of times but it ends up being an endless back and forth with a picker who is trying to offer up substitutes for everything. Just gave up on it.
Apparently Costco plans a fully separate online order picking area in one of their new massive warehouses. With that they won't have the uncertainty of shrinkage (Costco has a serious problem with theft), and of course the amount of inventory that is moving around the store in people's buggies.
I don't think there is any intention to it, but it's just a legacy remnant of being a very successful B&M company where they would periodically do an inventory and figure out where they actually stand.
Shopping at Costco is frustrating. It's fine for grocery staples (dairy, fruit, veggies, etc). But when it comes finding specific items in stock (and which aisle in the store), Target and Walmart are way ahead of Costco.
Ordering something at Target for Order Pickup is very straightforward and convenient. For Costco, I guess they don't want you to just order 1-2 items for order pickup and be on your way. Not to mention, the parking lot situation at Costco is a major turnoff to going.
We also hated Costco parking. We go 1 hour before close and no longer have any problems with it.
We also spend less time in line, aisles, receipt check, gas, and leaving.
Costco also accepted an item return over a year later. To be fair, it almost caused a fire by turning itself on in the middle of the night.
Its a wholesale club. The items aren't in permanent locations because they are making purchases in bulk when the price is advantageous to do so. This means they won't always have the same items all the time. The items you mention are in the same location regularly because the supporting infrastructure is permanent. Freezers for milk, desserts, the bakery and other products aren't going to move around very often.
For online ordering where do you want them to store your purchase? The whole layout of the store is that all available inventory is on the floor since its a warehouse by design. Target and Walmart are retail designed stores which has a different purpose in mind.
Seriously?, the parking is like any other store, there are peak and non-peak times.
I have a hard time understanding how someone can steal something from Costco. Sure, it's not impossible, but it seems really hard.
First, because of the size of the products themselves. It's hard to conceal them. And small items come in blister packs which are hard to open even at home. Second, because they have cameras and have almost every shopper's photo and address on file. Third, because they have the receipt checkers at the exit.
If I had to take a guess, it's more about policy than "they don't catch them". I doubt it's someone coming in, taking a TV and walking out.
It's more like if an item or 2 "sneak in" and the checker just lets them go. It'd cost more money in congesting the line, grabbing security, etc. to contest that item than it would be to just let them go. They don't want to press charges on someone who spent $100 because they wanted to sneak some $15 pills by. All stores expect X% theft anyway and build it into the price of their item (or secure it better if it's a small, often stolen good, like tech).
It's probably a cultural choice, though. Meanwhile, the Walmart down the street is much more aggressive on that stuff.
Given how people stuff their carts, seems like you could easily bury something expensive at the bottom. If the store is super busy the receipt checkers probably won't disassemble your whole cart.
Except with Amazon I always worry if it’s a Chinese counterfeit that is going to burn down my house, whereas Costco only carries curated, top-notch items.
I would think that if all your markup goes to warehouse and employees (operating costs) and the membership is all "pure profit", there's not a lot of money left over for R&D or tech upgrades without hurting your own margin.
At least if you take the article at face value in the simplicity of it's explanation. I imagine it's more complex than that
They can give you inventory though? Maybe it depends on the class of product though. When I tire or battery shop and they don’t have it they print me a list of other locations and quantities in stock.
However, Costco's technology is woefully inadequate for a wholesaler of their size. I've even heard this from Costco employees dealing with their employees portal (shout to /r/costco). Lack of sufficient tech is a systemic issue with them.
How is it possible that they cannot give me an accurate inventory of the items in the stores near me? Sometimes I see a product on social media and think "Hey it would be great to know if that product is only offered in Southwest US Costcos. Even trying to find a map of the store and where the products are kept (when there is some flux) is troublesome (yes, I get it's the "Ikea" method of needing to push you through the entire store).