Megaretailer Costco (NASDAQ:COST) has produced many happy returns for investors. Shares of Costco have risen by about 40% over the past five years, outperforming competitors such as Wal-Mart (NYSE:WMT), BJ's Wholesale Club (NYSE:BJ), and Target (NYSE:TGT). Berkshire Hathaway (NYSE:BRK-B) Vice Chairman and Costco board member Charlie Munger has said that "virtually none of the sins of modern capitalism are at Costco."

Costco CEO Jim Sinegal recently stopped by The Motley Fool to talk about his supersized business. In this first of three video installments, Sinegal talks about one way he checks out his competitors.

Mac Greer owns shares of Costco, which is a Motley Fool Inside Value and Motley Fool Stock Advisor recommendation. The Motley Fool owns shares of Costco. The Fool's disclosure policy enjoys both the little things in life and warehouse retailers' bulk items.