Costco's overwhelming focus on its Kirkland Signature private label has dramatically reduced the presence of outside brands in its warehouses, creating a self-reinforcing cycle that deters potential partners. The wholesale giant now derives a quarter of its revenue from Kirkland products, which generated billions in annual profit.
This shift began three decades ago when Costco launched its first Kirkland items, gradually replacing third-party goods with its own label. The strategy extends beyond products: Costco's membership model and exclusive Kirkland availability elsewhere make the brand feel more valuable, even if shoppers prioritize value over name recognition over brand prestige.
Source: Yahoo Finance · Summarized by HeadlinesBriefing