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Costco Wholesale’s Fortune 500 ranking

The Fortune 500 is an annual list of the 500 largest companies in the United States as accumulated by Fortune magazine. The list is assembled utilizing the latest figures for income and incorporates both public and privately owned businesses with publicly available revenue information. Costco Wholesale has been a leader in the warehouse club and retail industry for over three decades. Simply, Costco’s accomplishments as a company are tied directly to their ability to attract, develop and retain their best in the industry.

Costco Wholesale’s Fortune 500 ranking in 2016 is number 15. Costco’s worldwide headquarters are in Issaquah, Washington however the company opened its first warehouse in Seattle in 1983. Costco’s first location, opened in 1976 under the Price Club name, was in a converted airplane shelter on Morena Boulevard in San Diego. The company found it could reach a superior buying power by serving small businesses and a select audience of non-business members. As a result, the growth of the warehouse club industry was off and running. Costco became the first company to grow from zero to $3 billion in sales in less than six years. When Costco and Price Club merged in 1993 to become PriceCostco, it had 206 locations generating $16 billion in annual sales. According to Craig Jelinek, the Company’s President, CEO and Director, “Costco is able to offer lower prices and better values by eliminating virtually all the frills and costs historically associated with conventional wholesalers and retailers, including salespeople, fancy buildings, delivery, billing and accounts receivable. We run a tight operation with extremely low overhead which enables us to pass on dramatic savings to our members.”

Costco business strategy is to create high sales volume and rapid inventory turnover by offering fee paying members attractively low prices on a limited selection of nationally branded and selected private-label products in a wide range of merchandise categories. Costco Wholesale Corporation has over 700 locations in nine countries and more than 200,000 employees worldwide.  Costco’s mission is simple; to provides a wide selection of merchandise, plus the convenience of specialty departments and exclusive member services, all designed to make their members’ shopping experience an enjoyable one.

Their Code of Ethics is posted in the employee break area. The Code’s No. 1 Rule: Obey the law. Whether dealing with vendors, the company, employees, customers, the community, the law always come first. No decision can be justified under this Code of Ethics if it breaks the law. The law is irrefutable. Absent a moral authoritative to challenge a law, they want to conduct their business in total compliance with the laws of every community where they do business. Costco follows a strict Code of Ethics, which are strongly enforced with their compliance program. By stating that they pledge to obey the law, they cover all law-related issues that could arise. Not only do they state that they will obey the law, but they mention that they will obey it well, which could mean a lot to their customers and shareholders. Their main goal is to continually provide their members with quality goods and services at the lowest possible prices. Costco sets themselves aside from other retailers and also companies by taking good care of their employees. Costco considered their employees as their most important asset. They want to do the right thing for their employees by giving them reasonable income a wages and offer benefits for both full time and part time. All employees have a retirement plan and health insurance. They are also committed to providing their employees with rewarding challenges and numerous opportunities for personal and career growth. According to their executive managements, employees and management are alike, they must conduct themselves in an honest and ethical manner every day. Dishonest manner will not be tolerated. To do any less would be unfair to other employees who support and respect Costco’s dedication to moral business conduct. After all, according to their mission statement, their ultimate goal is to reward their shareholders. However, they can only achieve this by obeying their full code of ethics: to obey the law, to take care of their members, to take care of their employees, and to respect their suppliers. It is clear that treating their stakeholder’s right is important to their operations, and it is equally as clear that their vision works. Costco has proven that stakeholder theory leads to higher profits and happier shareholders as well. In almost every way, the loyalty and rewards shown to Costco’s stockholders only lead to increased profit for Costco. The good relations with their employees as well as suppliers and customers means that Costco’s inventory shrinkage is the lowest in the industry, which in turn, only helps to keep prices low for Costco’s consumers

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