Costco (Nasdaq: COST) has a massive advantage over most of its retailing rivals: extreme loyalty from its customers (who renew their memberships at high rates) and employees (who rarely turn over).

In the video below, Costco founder, chairman, and former CEO Jim Sinegal explains that advantage to The Motley Fool's own founder and CEO, Tom Gardner, who interviewed Sinegal recently in a Florida Costco store. (A transcript is provided below; running time: 2:44.)