Costco (COST 3.25%) is building some interesting new warehouses in Japan and elsewhere in the world, further evidence of the retailer's path toward strong future growth. In this video clip from "Beat & Raise," recorded on Sept. 24, Fool.com contributors Brian Withers, Demitri Kalogeropoulos, and Neil Patel take a look at the warehouse retailer's presence worldwide.
Brian Withers: This is another one that I'm just super surprised at. I guess I shouldn't be surprised that as the coronavirus abated and people started getting vaccines, they're out to Costco and spending more money. I was going to show a couple of slides, they have of Costco today presentation that has a couple of interesting little tidbits if you're not super familiar with Costco. Right in the beginning, they have a few of the, I guess these are the newest Costcos, and this is in Japan, and I don't know if you noticed there's something a little bit different about this Costco then, Demitri sees it. What's different?
Demitri Kalogeropoulos: Unless that's photoshop, I see a big parking lot on the roof. [laughs]
Withers: On the roof. Absolutely. It's on the roof, and they have the gas station here which is impressive. But I was just like, "Wow, look at all [laughs] those cars on the roof." It looks like it's a double-decker parking lot even on the top. That's pretty interesting. Certainly, the parking lot around the edges here smaller. Look at the next one. This is from a place near Nashville. You can see the huge parking lot and there's no parking on the roof. [laughs] Just a couple of more, Little Rock, Oklahoma, Springfield.
Neil Patel: Isn't Japan the country with the third most locations for them?
Withers: It has a warehouse that we'll see in a minute. But I didn't realize.
Patel: They have a lot of stores in the area.
Withers: Yeah. This didn't dawn on me either, that they're the third largest global retailer. I think that might be 12th largest retailer in the Fortune 500, I'm not sure. They may even be 12.
Patel: Yeah. It might be 12 overall actually.
Withers: A hundred billion mark.
Kalogeropoulos: It's interesting because I know they were the second largest at least for a while there. I wonder who hedged in there in second place behind Walmart, I'd have to check that.
Patel: Amazon maybe.
Withers: I'd wonder if they're counting Amazon as a retailer; 192 billion in sales, 288,000 employees. Here's the warehouses. They have 30 in Japan. So Canada, Mexico. It's likely that these are larger.
Patel: Iceland, wow. [laughs]
Withers: Iceland, pretty nice. Five hundred and sixty-four warehouses in the US, that's impressive. This must be their stores. They call them warehouses, right?
Patel: Yeah.
Withers: This number is pretty impressive to this cardholder thing. As you sign up for the executive, Demitri, you talked a little bit about the executive membership, you get I think it's now a Visa, it used to be I think a Mastercard. But you get points and you get cashback and stuff, and that's a super cool feature. Four billion in membership fee income. You talked about the 91 percent. Really pretty cool. Seems to be just doing well. I know they've worked on their online presence as well, and so that's a bigger deal.
Kalogeropoulos: That was something a lot of people were worried about for a while there too. It made sense that the bare idea that Costco's, it's pretty a big part of their competitive advantages that they have. They cover wide areas with their stores. They don't have a store within ten-minute drive of everybody. That 564, I think is compared to like a Walmart which might have over 2,000 locations in the US. You would think that might limit their ability to do quick drop two-day delivery or within 24 hours like Walmart's doing and what Target's doing. But there's no evidence that Costco is having any trouble with e-commerce compared to Target or any company that has way more stores. It's another wild factor for their logistics team.
