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Have You Seen Costco Wholesale Corporation's Secret Weapon?

By Anders Bylund - Feb 2, 2014 at 8:00AM

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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.

Wal-Mart (WMT 0.11%) 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 (COST -0.55%), 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.

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Stocks Mentioned

Costco Wholesale Corporation Stock Quote
Costco Wholesale Corporation
COST
$494.53 (-0.55%) $-2.74
Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
WMT
$148.21 (0.11%) $0.16

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