How Costco Became One Of The Most Popular Big Box Stores In The US

Costco first opened in 1983 in Seattle with a mere $25 membership fee. 200,000 people held Costco memberships by 1984. Though the stores don’t look much different today than they did 40 years ago, Costo is now a one billion dollar company.

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How Costco Became One Of The Most Popular Big Box Stores In The US

A Sommelier Compared Cheap Wines And The Winner Was Clear

Sara Lehman is the private sommelier and lifestyle director of 160 Madison, which is a luxury, residential high-rise building in Manhattan. She also owns the wine and travel blog Somm in the City. We gave Sara 11 different low-cost wines to try from big-box stores like Costco, Target, BJ’s, and Trader Joe’s. Watch the video above to see how she ranked bottles of cabernet sauvignon, pinot grigio, and rosé, all under $10.

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A Sommelier Compared Cheap Wines And The Winner Was Clear

A Wall Street Strategist Explains His Trade Deficit With Costco

David Kelly, Chief Global Strategist of JPMorgan Asset Management, explains why the US trade deficit with China doesn’t matter. Kelly explains that he runs a trade deficit with Costco and many other retailers. What does matter is whether you run a trade deficit overall. He says the cause for the US trade deficit is the country’s budget deficit.

Watch the full interview: https://www.businessinsider.com/david-kelly-on-trade-deficit-market-outlook-and-inverted-yield-curve-2018-7

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Following is a transcript of the video:

Sara Silverstein: So everybody’s talking about trade wars and trade deficits. What do people get wrong about trade deficits?

David Kelly: I wrote a piece actually, on my LinkedIn blog a few weeks ago called “My Trade Deficit with Costco” and I think it’s a good way of looking at this. I run a trade deficit with Costco. I buy a lot of their stuff, they don’t seem to want to buy what I have to sell, which is basically investment insight, but I run a trade deficit with almost everybody. I run a trade deficit with Whole Foods. I run a trade deficit with CVS. The only people that I run a trade surplus with are JPMorgan Chase, my employer, but that’s actually okay because overall, I run a trade surplus, and I don’t really care who I run the trade deficit with. So I think that’s the first thing.

We focus on, “We’ve got a real problem with China,” or “We’ve got a problem with Germany.” It doesn’t matter, so long as, overall, we run a trade surplus, we wouldn’t have a problem. But of course, we don’t. But then that gets to the second point. Why do I run a trade deficit with Costco? Or why do people get into problems in which they’re buying a lot of things from one group and not selling them? It’s because I overspent. And as a nation, we overspend.

The reason we have a trade deficit is actually because we have a budget deficit. If you think about it this way, you’ve got the private sector, you’ve got the public sector, you got trade. If the private sector more or less pays its way, if we fund our investment through our savings, but if the government runs a big budget deficit, if it spends a whole pile more than it’s taking in taxes, then we, as a nation, will live beyond our means. I think this is so important. It’s not a matter of tariffs, it’s not a matter of the dollar. If we run a big budget deficit, if we continue to buy more stuff — the government does and it takes it in taxes — we will run a trade deficit. So if we want to fix our trade problem, we got to start by fixing the budget deficit.

Silverstein: And to take your analogy further, when is it okay to run a budget deficit or a trade deficit as an individual, or a nation?

Kelly: It’s actually a very good point, because now, I suppose, I do overall run a trade surplus, and that’s good. But 20 or 30 years ago when I was a younger man I actually ran a trade deficit. I was borrowing money every year just to fund my expeditions to Costco, because I wasn’t getting paid enough. But that’s okay, because I knew that over time, I’d get paid more. And that’s actually true for — for example, emerging market economies. It’s okay for them to borrow a whole pile of money to grow their economies because they’re young, they’ve got plenty of room to grow. We are an old, mature economy. Our economic growth is going to be about 2% in the long run. In this kind of economy, and with so many people retiring, we actually should be running a budget surplus and a trade surplus. We should be storing up money to pay for our retirement, and of course, we’re doing exactly the opposite.

Sneaky Ways Costco Gets You To Spend More Money

Costco is a wholesale retail store known for its great bargains. It offers food samples, cheap gas, and sale items to attract customers and make their shopping experiences worthwhile. But strategies like these also encourage customers to stay longer and spend more.

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Following is a transcript of the video:

Narrator: Costco is known for its great bargains, and some things really are a deal, but they also have a few tricks up their sleeves to get you to spend more money. One trick Costco uses is to constantly rearrange the store.

Áine Cain: They tend to move products around in order to keep shoppers guessing. One thing might be in one location one day and then, the next time you shop, it’s not there. That can be kind of frustrating for shoppers, but it also is a pretty good strategy from their perspective ’cause you’re seeing all these new items and maybe getting a little tempted to buy more than you need.

Narrator: Items are placed on the end of an aisle to grab the attention of shoppers. Sometimes these items are on sale and it’s a good deal for shoppers. But other times, another company has paid Costco to put their product in a prime location.

Cain: So it can be a nice sale for you or it can be a bit of a trap because another company has stepped in and wants you to see their product.

Narrator: On the way to buy something practical, you might pass something enticing and make an impulse purchase. And some of those impulse purchases might not be a good deal. That’s another way they can get you. Because you’re in a bargain store, you might assume that everything costs less than it might somewhere else. But that’s not always the case.

Cain: The bargains are what you make of them and what you need in your lifestyle. I’ve interviewed 48 Costco employees, and one thing a lot of them say that they don’t buy is produce and perishable food. Because it’s a bulk size, they get so much of it that they end up not eating half of it and it spoils and they can’t use it.

Narrator: One thing that is worth your money is gas. Everyone’s always looking for the best gas price and Costco gas is cheap. But to get the gas, you have to be a member. That’s another way they get people to spend more money. Costco’s low gas prices lure in new customers. And if you’re already going to Costco to get gas, you might as well get your groceries too, unless the gas line is really long, which is one of the drawbacks. Another thing people rave about at Costco is all of the free samples, but it’s actually a good strategy.

Cain: I think, for Costco, it works because it makes it more of a destination and it definitely betters the shopping experience because you’re not just going there to shop, you’re going there to sample something new. And maybe you fall in love with a new product and then buy that product.

Narrator: Maybe you weren’t planning to buy brownie mix, but if you have a piece of a really good brownie, it might trigger a craving. These tricks may get you to buy more, but some of them give you good reasons to shop at Costco. As long as you do your research and stay focused, you’ll get that bargain you came for and a free sample or two to go with it.

Delisa Shannon: 18 bucks? I get these, like, oh my gosh.

Walker Hayes makes beats in DIY studio

After his first country record fizzled, Walker Hayes got a job at Costco to pay the bills and started making up his own beats and loops in a storage shed. Hayes said that once he realized he wasn’t writing songs to appeal to anyone but himself, he started writing the truth. (Dec. 19)

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