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Warehouse Clubs Are Cold and Creepy

The savings at Costco don’t make up for its antiseptic, impersonal stores. Pro or con?

Pro: Not Worth the Alienation

Costco is the most soulless of shopping experiences. Sure, there are lots of people, but they’re rendered grim and colorless by the cavern’s anonymous expanses and sterile fluorescent lights. Costco (COST) could wipe the smiles off the Von Trapp Family Singers’ faces in the middle of My Favorite Things.

Of course, there’s also the well-publicized tendency of consumers to overbuy and get stuck with lifetime supplies of Windex at Costco or its counterparts, Sam’s Club (WMT) and BJ’s. Costco’s store brand, Kirkland, is especially depressing, because there’s no effort to liven up the packaging.

I once bought a super tall—maybe 40-oz.—bottle of Kirkland shampoo. The quality of the product itself seemed fine, but it creeped me out to see the big dull-colored bottle in my shower every day for a whole month. The pump dispenser seemed convenient, but it gave out after about 32 ounces. If you think getting ketchup out of a Heinz (HNZ) bottle is a challenge, try pounding on an attenuated plastic eyesore at 7 a.m. It’s no way to start the morning.

Not that I object to store brands in general. White Rose, offered by my local supermarket, Gristedes, at least has a little something to earn one’s affection. The four-stick boxes of margarine I purchase cost only $1.19 and come in semi-cheery red and yellow packages. Best of all, the size is the same as its big-name competitors’, so there’s no risk of oversupply.

Unless I decide to open my own prison cafeteria, I’m delighted to continue paying extra to shop at regular supermarkets and grocery stores, even the ones with rude cashiers. At least they have personalities.

Con: Delightful Economy

I’m drawn to Costco like a moth to flame. Despite the hideous buzzing fluorescent lights, the portions too large for a single person with no pantry space, and the limited brand choices, I’m happy to shop there. Why? For starters, my thrifty nature thrills to the savings. On almost every item I buy, I save 10% to 30% off what I’ve paid in grocery stores, drugstores, and even Target (TGT), which I’ve confirmed by comparing receipts.

A close second is the quality of the fresh food and the fact that Costco stocks some of my favorite brands. I’ve never felt good about saving money by buying inferior store brands. Costco’s Kirkland-brand coffee is from Starbucks (SBUX). I buy all my fresh fruit at Costco. And then there are the little one-off surprises: cheap gas, a $13 healthy boxwood shrub that’s still thriving a year later, a $10 shrimp appetizer tray.

Granted, I’ve learned the hard way that some things aren’t worth the savings because the quantities are ridiculous—like the two-pack of 32-oz. bottles of dishwasher detergent I’m still using two and a half years later, or the six-pack of toothpaste, which doesn’t keep so well. I can’t get everything I need at Costco, so I spread my shopping out across different types of stores, buying smaller quantities of some things when they’re on sale at the A&P or RiteAid. But that experience only confirms the value I’m getting on my Costco purchases.

Over the years, I’ve been guilty of some impulse purchases, but I’ll keep going back to Costco because it satisfies my urge to buy better-quality stuff for less than other stores’ prices for mediocre products.

Opinions and conclusions expressed in the BusinessWeek Debate Room do not necessarily reflect the views of BusinessWeek,, or The McGraw-Hill Companies.

Reader Comments

Pearl Keng

We all want "soulful and personal," but we also want "affordable." Unless you're not out to make or save money, you can't have both. It's disingenuous to complain about the "soul" of a place when it never had one to begin with. Drop the pretense and shop, or go to a mom & pop store so you can pet the cat, chat with the owner, and buy your shampoo in a pretty (and pretty small) bottle. Souls don't come cheap.


Au contraire! The Costco I know, love, and visit during the week when the aisles aren't too crowded has a soul--that of an old friend. You know--the kind of friend who will help you save money when you need to (the $300 I saved on a pair of prescription glasses there this month more than paid for my annual membership fee for a long time) but also encourages you to have fun and splurge now and again (Island Way sorbet...mmmmm).


Soulless? Have you seen the free samples stands around every corner? And they are manned by Costco employees who smile and greet you but do not pressure you to buy. Last I checked, Wal-Mart and Sam's Club do not offer free samples. For 10% to 30% discounts and free samples, I know deep down in my soul that Costco will remain one of my favorite stores, especially in these hard times.


Personality is part of our spiritual existence. I would not expect a store to have a personality, because God did not breathe life into it. Additionally, it should be noted that Costco has an excellent reputation for treating its employees well. To be frank, with fruit and vegetables in most groceries running $2 to $5 a pound, Costco is the only way that middle class families can afford to eat the healthy meals that God had originally intended for in creation before the fall. Unless one has the time, talent, and weather to grow it all in one's backyard.


Having worked in retail for awhile and compared box stores, Costco is nice. You deal with people who offer quite a bit more at better prices, and treat their workers far better. Why would you want something else?


If the pro author prefers pretty packaging, smaller portions, and higher prices, what is she doing at Costco? Head to Safeway or Albertsons--they will gladly charge you more for less. We are not all as affluent as she appears to be. Pretty packaging is obviously important to some. To me, it's what inside the bag, not what's painted on the cover.


Some columnists are cold and creepy. I like Washington-based Costco just fine. Depends on the person and if they are shopping for many people.


Pro author, get a clue. Waah, my shampoo bottle is boring. Who cares? Costco would have given you your money back without a question even if you used it all. You must have missed that, huh? I shop weekly at Costco in Enfield, Conn., which is by far the best place for great food and great service.


After reading the pro column, I'd say her last paragraph really sums up the only category of people who Costco will never cater to--"I'm delighted to continue paying extra to shop at regular supermarkets and grocery stores." Believe it or not, there actually is a group of people that Costco doesn't want in their buildings, and it's the people who are "delighted to continue paying extra to shop at regular supermarkets and grocery stores." One can only imagine all the other products that she finds delight in paying extra for. Maybe she is one of the few Americans who are immune to all the foreclosures, job losses, bankrupt corporations, etc., that are occurring. But considering the current state of the economy and the direction that it's heading in, one has to wonder how long people like her can continue to find "delight in paying extra to shop at regular supermarkets and grocery stores."


Costco is a great place with great people. I think it's a wonderful place to shop with employees who go the extra mile. I have been a member since it was called Price Club, and I'll continue to be a member as long as they are around. It's the best place for the best deals and the best quality anywhere.


In these times you have to be a thoughtful shopper. Sometimes less is more if you don't have to store huge quantities and throw away half of it. On the whole, Costco offers a lot of value and quality. Packaging is a lure but not always a guarantee of quality. Loyal Costco shoppers know the quality of their products and trust the Kirkland and national brands they sell. On top of that nobody backs what they sell better than Costco.

Howard S.

Business magazine columnists should not presume to speak for the average consumer. There are those of us who would rather shop at the local Wal-Mart and buy what are becoming luxuries in the Age of Bush such as butter and eggs and milk at a third less than the price of same in the local "family friendly" supermarket. How about frozen concentrated orange juice at literally half the price of the supermarket's? Here in New Jersey, the only thing keeping the Costcos and Wal-Marts from carrying fresh fruits and vegetables and packaged meats and poultry is the potential threat from the mobbed-up grocery clerks and meat cutters unions. Now that's a story that BW does not have the guts to handle. Know that for a fact, first hand.


JG: You said it all, perfectly. Rebecca, your elitism is embarrising. Stay away from Costco; they are better off without you.

Rebecca Reisner writer Rebecca Reisner responds:
Thank you for your comments, all. I see the loyalty to Costco is strong, and I'm glad it's a pleasant and purposeful shopping experience for many people. I think my statements have been somewhat misconstrued, however.

For me, avoiding stores like Costco is an anti-elitist decision. I buy my dry goods from small neighborhood groceries run by first-generation immigrants from developing countries. Many of them work un-Godly hours to make a go of their businesses and earn money to send to family members back home. Like all convenience stores, they have to place high markups on their merchandise. If anything, shopping there--side by side with anyone from an investment banker to a homeless person--is an egalitarian experience. Likewise, my fruit comes from small open-air street carts manned by immigrant owner-operators who stand outside for 12 hours a day in hot summer sun or blistering winter cold. I feel good about patronizing these types businesses.

Costco, on the other hand, is a corporate entity, and I suspect many of its customers are affluent yuppies looking for bargains on cases of wine and giant flat-screen TVs. There's nothing wrong with that, but shopping in an airplane hangar isn't for everyone.


Costco is the best of breed. I'm a working stiff and need to food on the table and feed the family, and the best value in town is Costco. From buying tires to fresh vegetables and a high-end HDTV 52" LCD screen, its value pricing at its best; lunch is only $1.56 for a hot dog and Coke.


Sam's Club does offer free samples. In fact, last time I went, they had so many free sample offerings they were clogging the aisles. Also, currently at Sam's Club and Costco, I get greeted when I enter and exit the store, which is a lot more than I can say for grocery chains. Now, admittedly they are checking to make sure a) I am a member and b) I didn't steal and anything, but both of those checks help to keep their prices low.


I have only shopped at a BJ's once. I found the experience so overwhelming and depressing I was nearly in tears by the time I left the store. I do shop at Wal-Mart and ShopRite and many other discount stores, and maybe my experience at BJ's was unusual. But I used to work in a warehouse, and I'd rather not buy my food in one.


Costco does not have fluorescent lighting and each location has a lot of skylights. Who wants to pay extra for a good looking package? Isn't that the only part of the product that ends up in the trash anyway?


Rebecca, you're right, Costco is a corporate entity, but not all corporations are evil. What makes Costco different is that it supports small business.

A large number of Costco shoppers, such as my parents, are entrepreneurs running small companies, neighborhood grocery stores or family restaurants that couldn't otherwise compete with large corporate chains' direct distribution.


Your statements were not misconstrued. Your original post claimed that you like "shopping at regular supermarkets and grocery stores because they had personality" and that Costco was "soulless." Now that all of the follow-up posts are pro-Costco and disagree with you, you're attempting to save face. Nowhere in your original post did you mention helping the poor immigrant grocery. You did refer to Gristedes (, hardly the local immigrant food stand.

As an editor for Businessweek, you are no doubt better off financially than most in this country. I am certain that you can afford to buy pretty much everything you want without consideration of a budget. Costco provides quality products and quality service, at exceptional prices. As a member of the working middle class, I can tell you that I am happy to have such a store in my market.

And as for your decision to buy elsewhere being "anti-elitist," please tell me that you aren't serious. Do you really expect anyone to buy that crap? (Yes folks, the elite are lining up outside Costco to buy their items in bulk.) Rebecca, do yourself a favor. The next time you write something that is so far out of touch with the average American, simply apologize for being out of touch. Your attempts to save your original post have only made you look more foolish.

weekly costco shopper

"...fluorescent lights"? Aren't those high-pressure sodium lights?


I'm both a Costco customer and stockholder. The company is noted for its excellent employee wages and benefits, resulting in very low turnover. I am convinced that Costco is a company that demonstrates superior business performance by giving customers great value without compromising employee pay. Soulless? Hardly.


There is nothing elitist about Rebecca's writing, opinion, or humor.

Come on, people. She makes excellent points about the downsides of the homogeneity that is indicative of all the big box stores. We are moving further and further away from creativity and personality in retail and closer and closer to brass, crass materialism, cluttering our homes and piling up insurmountable debt.

Thank you, Rebecca!

John Adams

Good job, Anon. Rebecca simply does not know what she is writing about, which I believe, is supposed to be the first step in journalism. To imply that other stores have employees who work harder is just plain stupid. Who do you think stocks that Costco warehouse? She also mentions supporting foreign employees who send money home (outside of the USA) like she is some kind of hero for doing this. I will echo Anon's words; stop trying to save face. Get in touch with the rest of the country before you try relating to them, if you can.


I love Costco and shop there every week. I don't consider it to be a cold or heartless store, mostly because I'm not looking to make best friends at the place I shop. I just want a good value for the price, and Costco beats everyone hands down. On my blog, Addicted to Costco, I recently did a comparison of 43 items at four different stores around me. It was a huge confirmation of Costco's being the best place to shop.


I've worked at Costco since 2001. I'm part-time while I finish up college. As a part-time worker, I'm getting health and dental benefits, sick time, vacation time, a retirement plan, and holidays off, and they work around my schedule extremely well. Not to mention the people I work with are all awesome. I've become pretty good friends with a few of them. So yes, Costco does treat the employees very well.

Also, its good to see the appreciation of our hard work and so many good things being said. Thanks!


To Ryndolyn:
I never suggested that Rebecca's writing, opinion, or humor was elitist. I was commenting on her statement: "For me, avoiding stores like Costco is an anti-elitist decision." I am curious to know how avoiding Costco is anti-elitist?

The statement implies that the rich and elite shop at Costco (they don't), or to stretch things a bit, maybe Rebecca was trying to say she didn't want to support the elite owners/management of Costco. If the latter interpretation is her intent, she is once again off base. In terms of corporate culture, I will borrow a word from Rebecca, Costco breeds an "egalitarian" type environment. The CEO answers his own phone, has secondhand furniture, tries to visit each store once a year, has an open door policy, and makes a fraction of the salary of comparable CEOs by his own choice (he said it wasn't fair for one employee to make that much more than another employee). James Sinegal is a breath of fresh air when compared to the current culture of corporate greed and misgivings.

Zipper Gang JL

I shop at both Costco and Sam's, which in Palm Desert, Calif., are across the street from each other. The Costco lot is always filled with cars, and a lot of those cars are Mercedes, Lexus, Jaguars, and other cars of that ilk. Apparently those folks are not ashamed of being seen there. Many of our neighbors shop there almost exclusively. The meats there are top shelf, as are the produce and the adult beverages--at prices no one can touch. The store is well-staffed, friendly, and helpful. Both Sam's and Costco offer samples during the daytime. I just wish Costco was better represented in the Minneapolis-St.Paul area, where our summer home is. Thankfully, Trader Joe's is starting to make inroads in the Twin City market.

We also shop for groceries at Wal-Mart, also located on the same corner. Used to pay high prices and get lousy produce and meat at Ralph's or Albertson's. Not anymore.


I find Costco and its employees to be helpful and well managed. No complaints at all. They are doing a great job.


As a guy who does not like to invest anything in the shopping experience, the warehouse that is Costco--its lack of carpeting or cabinetry or mood music--works fine for me. The selection is a bit limited, but there are several products that are so good I will make a special trip there for them. On my first trip to the Costco in Arlington, Va., I bought four white all-cotton Polo brand dress shirts for $25 each. Why would I go to a department store and pay double for the same thing? And I have to say that the mom-and-pop stores in my neighborhood in Washington, D.C., were expensive and had a miserable selection and unfriendly staff. Rebecca, you could always refill a nice shampoo bottle from that limitless Kirkland one.


I think it's our only tangible link to everyday life in the Third World.



A worse aspect of Costco is its irresponsibility by only carrying the things it can maintain high profit margins on. As a result, it often doesn't have basic items you need while your membership elapses. It doesn't have bananas for months, just because it can't get from the cheap sources. A while ago, it did not have any organic milk for a lengthy period of time. I believe there are many items missing from time to time for profit reasons. It still could survive because it is too big for others to offer valid alternatives, but not for too long; Costco is going to suffer. I call for all the consumers to shop smart and do whatever we can to penalize any retailer for its irresponsible practices.


Having been a specialty grocer for 19 years allows me to understand that in Southern California, Costco has the freshest and best variety of produce, even compared with the highest quality chain supermarket. You can say the same for their choice grade meat and fresh fish. Employees are properly paid, providing for low turnover and knowledgeable individuals who stop to help. The stores carry 4,000 skus vs. 40,000 skus for the average supermarket. Their stores are extremely clean. They buy quality soft goods at closeout prices. They do not mind being out of stock. The Kirkland store brand (usually rated highly by Consumer Reports) carries a 16% markup while name brands are 15%. If a buyer's section deviates from this rule they are promptly advised of their failure. A Costco store perimeter compels visits for non-daily necessity needs: pharmacy, eyeglasses, hearing aids, tires, gasoline, and their snack food counter. Jim Sinegal, President, is paid either $350,000 or $500,000 a year, a big departure from normal overpaid CEOs. He is a leader who sets the operation's tone. I am a longtime customer and shareholder.


I love Costco. The place exceeds my expectations when it comes to service and price. I visit the store at least once a week, and I look forward to each visit to check out what new items they have. It is part of my community.


Soulless! A corporation that respects laws, treats employees and suppliers fairly, goes out of the way to satisfy customers, and has a CEO that does not want an arm and a leg for salary.

I have just lived in this country for a few years, but nothing seems like a better example of the American spirit than stores like Costco.

Frankly, I go to other stores when I don't find things in Costco. I have seen produce stores (yeah, even the Mom and Pop kind) with expired products on shelf, but never with Costco.

Too often a brand is not fancy packaging or the external appearance. Costco is a brand that stands for value, quality, and reasonability with a consciousness.

Yes, it does not have the superficial "soul" as defined by the author, but it sure makes my life easier.


Rebecca: You know you personify that elitism. Reading your first column has all the elitist words--soulless shopping experiences, grim and colorless, depressing, no effort to liven up the packaging.

You admit the quality of the shampoo was great, but the color of the bottle itself was dull. And you cannot stand this at 7 a.m. in the morning? There are people busting their rear at 7 a.m. while you are in your shower whining about the color of your shampoo bottle? Can it be more elitist than this?

You call "rude cashiers" at supermarkets having personalities. What kind of sick person goes to greedy price-gouging superstores to face rude cashiers and defend them of having personalities--as if it is a desired quality?

Now you know Businessweek's readers can call spade a spade. And you try to invent a new theory a la Hillary Clinton's Bosnia sniper fib. You bring in street corner shopping carts to your new argument. To prove what? Your support for immigrants. That's a ridiculous follow-up argument. I wonder if a publication like Businessweek actually paid you to come up with this ludicrous piece.


At least Costco has quality, unlike China-Mart and Sam's Club.


This whole debate is just plain silly. There is something out there for everyone, and Costco offers a choice just like local street vendors. Why not be glad that we live in a country that has choices? Pay more, pay less, plain packaging, fancy's your personal business. To describe a store as soulless, cold, and creepy is silly journalism.


If Costco is a corporate entity, then how do you explain this statement?:

"I'm delighted to continue paying extra to shop at regular supermarkets and grocery stores, even the ones with rude cashiers."

Aren't the supermarkets owned by corporations, and pay a pittance to the cashiers?

At least Costco pays their employees good.


As retirees who don't need to always get the lowest cost per ounce, we have cut back by 80% at Costco. At this stage of life, we want choice and quality. That means buying "just in time," in usable quantities and the latest in technology. (The latter is the biggest disappointment at Costco.)

By shopping for hardware and soft goods on the Internet, we are satisfied 99% of the time with prices and quality. As for food, we go to Winco, where, for example, we can buy 2% reduced fat Lactaid Milk in 1/2 gallon cartons--unavailable at Costco, where you must get four gallons of regular milk plus a bottle of Ultra Lactase.

Shop smarter, eat better, and live longer (maybe).


The irony for me is that Costco is one of the few retailers out there that doesn't treat its employees like garbage, even despite the fact that its stores aren't what you would call pretty by any stretch of the imagination. Because of this, I'll keep shopping there and avoid Wal-Mart and its subsidiaries like the plague.


It might have the warehouse look, but they sell top brand merchandise at very competitive prices. Customer service is the best of any of the big-box stores.


Let me give you a simple solution to your "boring bottle" problem.
1. Get a nice-looking shampoo dispenser
2. Buy shampoo from Costco and fill it in a "nice looking" bottle.
3. Keep the nice-looking bottle for daily use and the Costco bottle in storage under sink.

How about it?


Balancing the service that Costco provides versus what the small, cozy neighborhood Mom and Pop can provide is nearly impossible. I suggest you look at the Costco mission statement:

Regarding the shampoo bottle: Get a second container with a snap-opening top. Fill the second container with shampoo and stand it upside down. Gravity works, no morning start-up issues.


I shop at Costco because by buying in bulk, I save a lot of money. I do have the pantry room to store it, though. I basically buy things like paper towels, tissues, toilet paper, canned goods, and boxed items that do not go bad. My meats, breads, etc., I share with my son. I like Costco's photo processing. I rarely buy personal items such as shampoo, toothpaste, etc. I have bought furniture items, which have been a great deal. New tires have been a great deal. Just buying only the things I need it is well worth my money.


We live near both a Sam's and a Costco, and we love them both. They both have better service than Target. We buy bulk items that make sense and save dollars. We buy a brand name prescription for our son and save more than 30% over any pharmacy in town ($140 at Sam's and $137 at Costco vs. $189 at Walgreens per month). The only thing I can't figure out is how we can never leave either one with less than a $200 to $300 tab.


I spent close to $600 per month on average in Costco, and I've been a customer for six-plus years, and I am pretty sure that I am their customer forever. Customer service is one aspect that I love the most in Costco. They gladly accept returns without any questions (except for electronics) even after one year. I don't think there is any store/chain in the word that can provide that.

Way to go, Costco.


If Costco is all you guys say it is, then how come the CEO of the company put out a comment saying: "We will limit rice and flour purchased by a customer." When the question is asked: "Why?" His answer is this: "We don't want customers stock-piling." Sounds like a dictator to me. Why does it matter how much I buy? If I wanted to spend my entire paycheck buying rice, that is my right to decide, not his. I know what is best for myself and my family, not some CEO. On the plus side: I believe this food shortage is a ploy to spur the ailing economy.


JT, you have to be a member to shop at Costco, so therefore, the CEO has every right to dictate how much he wants to sell to the member. Left-wing liberals are crying about losing their jobs so they can buy a new appliance (made in China) at Wal-Mart once the rebate checks come in.

Costco is not the flashiest place out there, but again they never advertise (to my knowledge). They also give the consumer value financially and in confidence that they can return products and have 100% satisfaction. Let's face it, you know what you are getting at Costco--no if's, and's, or but's. It's better than staring down the cereal aisle in a supermarket where you see three shelves dedicated to a cereal you have little interest in.


Whenever I've contacted Costco employees, they've been eager to help me. They provide an excellent combination of low prices and enthusiastic staff. BW's own 2004 comparison of Costco and Wal-Mart employment strategies is evident whenever I visit either store. Here is a link to that article:


I think that a lot of people have misinterpreted the intended spirit of this debate topic. I took it as a light-hearted, tastes-great-vs.-less-filling kind of debate, an excuse for some spirited verbal sparring on a subject of less than earth-shattering importance. Words like "soulless" and "creepy" are meant to evoke a response--which obviously they did in this case. But it's disappointing to see how personal and nasty people have gotten; good grief. Live free, shop where you like--and don't take it so darned seriously.


The first time my husband went to BJ's Discount Warehouse, I thought we'd need to build an extension on the house to accommodate all the purchases. There's something to be said for buying in bulk, but I leave it to him, because it is an intimidating environment.

Zipper Gang JL

There are several points I forgot to include in an earlier post:
1. Costco and Sam's are first of all warehouse clubs as the headline implies.
To maintain the low markups they have, they reduce their overhead as much as possible by having large-quantity sizes.
2. What Mom and Pop grocery stores are left in the U.S.? Other than neighborhood bakeries, all grocery operations are chain operated, owned by public corporations with a variety of names.
3. For small restaurants, etc., Costco-type stores are huge lifesavers to stay in business.
4. For your typical American family with a couple of children, the savings on groceries and dry goods has to be also a lifesaver, particularly when gasoline prices are now at or near $4.


For those that can afford ambiance, feel free to shop where you'd like. But, personally, I go shopping when I need something. If there's a cost savings in using fluorescent lights and not having pleasant staff to wait on you, I'll opt for the cost savings. By the way, I've never had any issue with Costco, or for that matter Sam's Club, employees being anything but reasonably pleasant.


People go to Costco to save money and/or enjoy its warehouse-like appearance. While Costco doesn't necessarily look nice and appealing to the eyes, they do have comfortable display furniture to sit on--or as long as you want. They have demo tables full of sample foods. Some folks are known to go to Costco for a free lunch. In some Costcos, you can stand and admire rows and rows of chicken and ribs being cooked on rotisseries, while eating your $2 hot dog and soda. It can be said that Costco is an experience of its own, unlike Macy's, Nordstrom's, your local mall, or your local Safeway, Albertson's, or Lucky's or your local store.
Again, most shoppers will want to save dollars rather than enjoy ambiance, but I argue that Costco has a unique environment of its own.


A bit off topic, but since Costco customers are likely to be reading this, I have a simple question: How do you release the pump mechanism on the top of the Kirkland brand shampoos? I don't remember having any problem before, but these latest don't pull up, so perhaps they have changed their system. Thanks.

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