A Burgeoning Growth Engine for Costco: Wanton Alcoholism

Costco has to be the single best retail business in the world. A new Costco just opened in area and I signed up for their "executive" membership card, which is something that I feel wholly ridiculous -- but I did so nevertheless.

In order to attain the privilege of shopping there, customers must pay an annual fee. In an era where every retailer is tripping over themselves to attract customers, this concept isn"t dually brilliant and absurd.

Their private brand, Kirkland"s, has also attained legendary status -- viewed by many as representative of value and quality. A new engine of growth for Costco is now enjoyed in wine, beer, and spirits.

Last year, alcohol brought in $3.8b, half coming from bullshit wine. This business has grown by 46% over the past 5 years, outpacing food and sundries.

“Private label continues to grow as a dominant strategy in retail -- especially when it migrates from being a ‘label’ to more of a ‘brand,’ which Kirkland has done,” said David Bassuk, managing director at consulting firm AlixPartners in New York. “Now it’s a well-known name and gives the consumer a perception of value and a good deal.”

 
The reason for their success lies in the perceived value. The company only marks up prices by 10-14% compared to industry norms of 25-40%.
 

“They’re doing the opposite of looking to cut corners,” he said. “They’re looking for maximum quality and minimum markup to drive value for the member.”

 
Other retailers like Whole Foods, Walmart, and Target have entered the private label business for booze too and have enjoyed success, thanks to America"s proclivity to drink themselves into stupors. Even still, Costco is widely regarded as the winner in this high growth space -- clawhammering local liquor stores into a thousand pieces wherever they encounter them.

Both the stock and revenue/earnings trends have been steady eddy, in spite of an overall lackluster retail environment.

Ancillary beneficiaries are $STZ, $DEO and BF-b.

Happy pre St. Paddy"s day.
Content originally generated at iBankCoin.com

Google Nation - Visualizing The World's Most Valuable Brands

The world’s most valuable brand is owned by a company that you likely interact with every day. In fact, you may have even gotten to this web page using it.

That brand is Google – and it dominates the internet with a 64% market share in search, while generating 41% of all digital advertising revenue globally. As Visual Capitalist"s Jeff Desjardins notes, according to Brand Finance’s most recent 2017 list, Google’s brand value has recently increased to $109.5 billion, which is just enough to supplant Apple’s $107.1 billion brand from the top of the list.

THE MOST VALUABLE BRAND IN EACH COUNTRY

Today’s infographic comes from HowMuch.net, a cost information site, and it breaks down Brand Finance’s list of the top 500 brands in a different way. It shows the most valuable brand for each country, and has each country sized accordingly to the dollar value of that company.

It’s interesting to note the drop off in value from country to country.

Google is the world’s most valuable brand at $109.5 billion – and it is followed closely by other U.S. brands like Apple ($107.1B) or Amazon ($106.4B). However, there are only two non-U.S. brands in the top 10, which are South Korean conglomerate Samsung ($66.2B) and Chinese bank ICBC ($47.8B).

Two automakers also rank pretty high. Japan’s Toyota and Germany’s BMW both have significant valuations at $46.3 billion and $37.1 billion.

After that, it’s a pretty steep fall in value for most countries. The top brands in countries like Canada, Italy, Switzerland, Australia, Russia, India, and Spain don’t crack $20 billion in value. On the entire South American continent, the most valuable brand is Brazil’s Itaú, a bank with a brand worth only $6.9 billion.

By our count, a whopping 76 of the top 100 brands were based in either the United States, China, or Japan.