Costco Wholesale Corporation, or Costco, is an American multinational corporation. It operates a chain of membership-only big-box retail stores. In 2020, the company generated revenues of $166.76 billion. These revenues made it the fifth-largest retailer in the world. Similarly, Costco also ranks in the top 10 Fortune 500 companies in the US by total revenues.
Costco started its operations in 1976 and currently operates from Washington, US. Similarly, the company owns over 800 stores in several countries. These include the US, the UK, Canada, France, China, Mexico, Spain, Australia, and many more. Costco also opens new locations in its current markets regularly. Overall, the company ranks as a top name in the retail of various food items.
Being one of the oldest names in the market, Costco has gone through various ups and downs. However, during these years, it has also attracted significant competition. This competition gives customers several alternatives from which they can choose. However, it also poses a threat to Costco’s business, being significantly critical for its operations.
Some of the top Costco competitors and alternatives include the following names.
1. Walmart
Walmart is an American multinational retail corporation. The company started its operations in 1962, although it originates back to 1945. Overall, Walmart has over 10,500 stores and clubs in over 24 countries. The company also owns various other brands, which provide a significant boost to its revenues. In terms of competition, Walmart is Costco’s most prominent competitor.
Walmart is the world’s largest company by revenue, generating $559.2 billion in 2021. The company operates in its primary US market. However, it also has its Walmart International brand across several countries. These include China, India, Africa, Canada, Mexico, Canada, etc. It is also one of the most valuable brands in the world, according to Forbes.
2. Amazon
While Amazon doesn’t directly compete with Costco, it is a name to consider in the industry. Amazon is an American multinational technology company that primarily focuses on e-commerce sales. However, it also has various other business ventures, for example, cloud computing and digital streaming. Amazon ranks among the top technology companies in the US.
Amazon started its operations in 1994 as a bookstore. However, it is currently a giant online store that sells various products and services. In terms of functionality, Amazon operates similarly to Costco, although it focuses on the digital market. It is also the largest internet company worldwide, with $425.064 billion in revenues in 2020.
3. Target
Target is another American retail corporation that primarily operates in the US market. The company ranks as the eighth-largest retailer in the US. Overall, Target is well-known for its discount products. It has existed since 1962, although it originated in 1902. The company has over 1,800 stores in the US and ranks among the largest US corporations by total revenues.
Target is similar to Costco in the products and services it provides. The company also owns various subsidiaries, which allow it to operate in other markets. On top of that, it also oversees some private-label products, which provides it more revenues. The company also operates an e-commerce business to cater to the digital audience.
4. The Home Depot
The Home Depot is a US-based retailer that specializes in home improvement products. The company sells items such as supplying tools, construction products, and services. Currently headquartered in Georgia, the company primarily operates in the US market. However, it also provides services in other countries, such as Canada and Mexico. The Home Depot owns 70 distribution stores across the US.
The Home Depot started its operations in 1978. However, it focuses on a specialized market for home improvement products. Although it doesn’t directly compete with Costco, it provides significant competition in its market segment. The company generated $36.8 billion in revenues in 2021, which increased by $3.3 billion from 2020.
5. The Kroger Company
The Kroger Company, or Kroger, is an American retail company that operates from Cincinnati, Ohio, US. The company started its operations in 1883. Currently, it ranks as the largest supermarket by revenue in the US and the second-largest general retailer. The company also ranks among the largest US corporations by total revenue. Kroger operates over 2,700 supermarkets in the US.
In 2019, Kroger generated revenues of $121.16 billion. However, these revenues only contributed to a net income of $3.11 billion. Kroger also owns various other chains, which contribute to its profits. These chains have several formats, including marketplace, multi-department, combination food and drug, and price impact. Apart from these, the company also owns various manufacturing plants.
6. Tesco
Tesco is a multinational grocery and general merchandise retailer based in the UK. The company currently operates from Welwyn Garden City, England. Overall, Tesco is the third-largest retailer in the world by gross revenues and ninth-largest by revenues. Although it primarily serves the UK market, it also owns stores in five countries across Europe.
Tesco started its operations in 1919 in London. Over the years, the company has expanded its operations to 11 countries worldwide. Although it operated in the US, Tesco pulled out of the market in 2013. In 2020, Tesco generated revenues of £64.760 billion. As it is one of the top names in the retail industry, the company poses a significant threat to Costco as a competitor.
7. Walgreens Boots Alliance
Walgreens Boot Alliance is an American holding company that owns pharmacy chains Walgreens and Boots. The company also operates in pharmaceutical manufacturing, wholesale, and distribution markets. It started its operations in 2014 after Walgreens purchased the 55% stake in Alliance Boots. After that, Walgreens formed Walgreens Boots Alliance to manage both brands.
Walgreens Boots Alliance ranks among the largest companies in the US by total revenue. It divides its operations into three divisions, including Retail Pharmacy US, Retail Pharmacy International and Pharmaceutical Wholesale. In 2020, Walgreens Boots Alliance generated revenues of $139.5 billion in revenues. Similarly, it owned over 13,400 stores worldwide.
8. Aldi
Aldi is a supermarket chain brand that operates from Essen and Mulheim, Germany. The company owns over 10,000 stores across 20 countries. Initially, Aldi began its operations as a store by two brothers Karl and Theo Albrecht, in 1946. Later, they split their business into two groups, known as Aldi Nord and Aldi Süd. Aldi competes with Costco in the US through 1,600 stores.
Currently, Aldi’s operations include Nord’s 35 individual regional companies and 2,500 stores. Similarly, it consists of 32 regional companies and 1,900 stores from Aldi Süd. The former group covers eastern, northern, and western Germany. The latter runs in western and southern Germany. Apart from Germany, Aldi also operates in Denmark, France, Portugal, Spain, Poland, among others.
9. Best Buy
Best Buy is an American multinational retailer of consumer electronics founded in 1966. The company started its operations as a specialty audio store called Sound of Music. However, it got rebranded in 1983 to Best Buy. Best Buy operates in several markets, including the US, Canada, and Puerto Rico. It also included the Chinese market until 2011.
Best Buy has received various accolades due to its operations over the years. The company primarily focuses on the consumer electronics and appliances market. Due to these operations, Best Buy generated revenues of $47.262 billion in 2020. Apart from its physical stores, Best Buy also operates an e-commerce platform, where it sells its products.
10. Lowe’s
Lowe’s Companies is an American retail company that specializes in home improvement products. Lowe’s operates a chain of retail stores in the United States and Canada. Currently headquartered in North Carolina, the US, the company started its operations in 1921. The company is the second-largest hardware chain in the US, falling short of rival The Home Depot.
Lowe’s Companies generated revenues of $72.148 billion in 2020. These revenues are the highest in the company’s history. Although not a direct competitor to Costco, Lowe’s competes with its Innovel segment. Lowe’s also ranks among the top Fortune American companies. The company also resides among the top employers in the US.
Conclusion
Costco is a US-based multinational retail store. The company owns over 800 stores worldwide, 558 of which are in the US. Overall, Costco has been operational since 1976. Over the years, it has gone through many ups and downs. However, it currently ranks among the top retail stores in the US. Due to its success, Costco has attracted several competitors and alternatives, including the ones listed above.
