Have You Seen Costco Wholesale Corporation's Secret Weapon?

Costco has a secret weapon in the eternal war against Wal-Mart and other ultra-traditional retail rivals. Spoiler alert: If you're a Costco member, you've seen it often.

Feb 2, 2014 at 8:00AM

Wal-Mart (NYSE:WMT) may be the king of huge-volume retail, but is it the best stock in the industry?

Wal-Mart is indeed a giant: It's the only retailer on the Dow Jones Industrial Average and a recession-proof stock thanks to its low-cost sales model. But there's a heated rivalry going on with Costco Wholesale (NASDAQ:COST), where founder Jim Sinegal's brilliant leadership uncovered a secret weapon. This trick lets Costco compete with Wal-Mart and even Amazon.com (NASDAQ: AMZN) on product prices while also treating its employees to high wages and great benefits -- and still make a generous profit.

In the video below, Fool analyst Anders Bylund will clue you in on Costco's secret weapon, which lets the company run head-to-head with new-age online retailers like Amazon while crushing staid dinosaurs like Wal-Mart.

The death of Wal-Mart: Meet the new cash kings of retail
Wal-Mart's industry dominance is fading, and a hungry legion of new cash kings is closing in fast. To learn about two retailers with especially good prospects, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform, and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.

Fool contributor Anders Bylund has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Amazon.com and Costco Wholesale. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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