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suppose we should be accustomed to it by now, but Costco’s scale continues to be
mind-boggling. In its last fiscal year, the warehouse giant posted beverage alcohol
sales of a whopping $4.4 billion, with wine accounting for more than $2 billion of that
total, and spirits and beer evenly splitting the remainder. In the U.S. market, Costco
has wine licenses for 448 stores and spirits licenses for 317 stores.
Beer, meanwhile, is sold in 458 Costco locations.
Even with such an enormous footprint, Costco remains in substantial
growth mode. Total beverage alcohol sales showed a 6% increase last
year, and 21 new warehouses were opened in states including
California, Michigan, Nebraska, Minnesota, Florida, Washington,
Texas, South Carolina, and Georgia. Some 15 of those new units
sell wine, spirits, and beer, while four sell beer and wine only. In
total, Costco sells wine and beer in 45 states and spirits in 35 states.
Few competitors can match that geographical scale.
Despite its enormous size, Costco has stuck to a selling philosophy of
carrying a relatively limited range. Its stores usually offer about 150 wine
SKUs, 45-60 spirits SKUs, and 14-18 beer SKUs—a tight lineup.
Within that selection, however, there’s a lot of rotation, with an
eye toward keeping things new and trendy. And Costco also makes
it a priority to seek out rare, hard-to-find bottles—including aged
Japanese whiskies and ultra-luxury Cognacs. Judging from the results, it all appears to add
up to a formula that works. Check out our profile on this retail giant on page 30.
Elsewhere in this issue, we observe the role of Italian spirits at the bar, where they’ve estab-
lished a foothold that continues to grow. We also have a feature report on the gin category,
which I believe is on the launching pad for a major takeoff. Finally, we keep you up to date
on the remarkable progress of rosé wine, which is now a long-term growth phenomenon.
And there’s much, much more.Enjoy the issue,
Marvin R. Shanken
EDITORIAL
Blowout Numbers
JUNE 2019 | MARKETWATCHMAG.COM | MARKET WATCH 9