Customers Like Shopping at Costco In-Store and Online: Here’s Why With Insights from the Grocerant Guru®

 

Costco Wholesale has long been a favorite among consumers seeking quality products at competitive prices. Over the years, the company has adeptly evolved, blending its renowned in-store experience with a burgeoning online presence. This strategic evolution has attracted new customers and fostered loyalty among existing members. However, as Costco expands, some critics claim it may be too large to remain agile and customer-focused. Steven Johnson, the Grocerant Guru® at Tacoma, WA-based Foodservice Solutions®, disagrees.

"The key to Costco’s ongoing success is its ability to adapt while staying true to its core principles—value, convenience, and customer trust. Rather than being ‘too large,’ Costco has mastered the art of simplifying complexity for customers, making shopping effortless and rewarding," says Johnson.

Let's explore seven historical reasons behind consumers' migration to Costco and five strategies the company employs to retain them, along with insights from the Grocerant Guru® on why bigger does not mean bloated for Costco.

 

Seven Reasons Consumers Have Migrated to Costco:

1. Value-Oriented Membership Model:

Costco’s annual membership structure provides an exclusive club-like shopping experience where customers feel they are getting premium deals. This model encourages loyalty and repeat visits, making shopping feel more like an investment than an expense.

💡 Grocerant Guru® Insight: “A membership-based model fosters built-in loyalty and recurring revenue, enabling Costco to reinvest in pricing, quality, and new service enhancements without losing focus on the consumer.”

2. Private Label Excellence:

The Kirkland Signature brand has disrupted traditional grocery store brand hierarchies. It offers premium products at lower costs than national brands while maintaining high quality, keeping Costco’s value perception strong.

💡 Grocerant Guru® Insight: “Private label success isn’t about price alone—it’s about trust. Kirkland Signature products deliver on the quality promise, making consumers feel like insiders to an exclusive deal.”

3. Diverse Product Selection:

Costco is no longer just about bulk groceries. Its product mix includes apparel, electronics, home goods, and even travel services. This wide variety enhances convenience, allowing customers to consolidate shopping trips.

💡 Grocerant Guru® Insight: “Shoppers love bundled value. Costco’s ability to cross-sell essentials, treats, and big-ticket items under one roof maximizes shopping efficiency.”

4. In-Store Experience:

Costco’s treasure-hunt merchandising strategy keeps customers engaged. Limited-time offers and ever-changing inventory create a sense of urgency and excitement, encouraging repeat visits.

💡 Grocerant Guru® Insight: “Scarcity marketing drives action. Costco’s rotating inventory ensures customers discover something new on each trip, reinforcing visit frequency.”

5. Competitive Pricing Strategy:

By leveraging economies of scale, Costco keeps its pricing competitive. The company also limits advertising expenses, relying on word-of-mouth and brand trust instead.

💡 Grocerant Guru® Insight: “Costco’s low-price perception isn’t a gimmick—it’s an earned reputation that customers rely on. Even if consumers shop elsewhere, they often return to Costco for bulk essentials.”

6. Quality Customer Service & Return Policies:

Costco’s generous return policies and exceptional customer service reinforce consumer trust. Shoppers know they can return items hassle-free, making purchases feel risk-free.

💡 Grocerant Guru® Insight: “Customer confidence is Costco’s invisible currency. Hassle-free returns translate to higher spending per visit because shoppers feel secure in their purchases.”

7. Adapting to Consumer Trends:

Costco’s product mix now includes organic, plant-based, and health-conscious options, aligning with shifting dietary preferences.

💡 Grocerant Guru® Insight: “Costco doesn’t just follow food trends; it scales them. The grocerant niche—ready-to-eat and heat-and-eat meals—will continue to be a growth driver.”

 

Five Strategies Costco Uses to Retain Consumers:

1. Enhanced E-Commerce & Same-Day Delivery:

Costco has rapidly expanded its online presence, with double-digit e-commerce sales growth in 2025. Same-day delivery partnerships and streamlined curbside pickup services keep online customers engaged.

💡 Grocerant Guru® Insight: “Costco proves that bulk shopping and convenience can coexist. The company has nailed digital integration without compromising its in-store experience.”

2. Investment in Technology & AI:

Costco’s AI-driven inventory management ensures high-demand items remain stocked, while self-checkout expansion and mobile ordering reduce wait times.

💡 Grocerant Guru® Insight: “Automation isn’t replacing Costco’s customer-first approach—it’s enhancing it. Smart tech minimizes friction, allowing members to shop efficiently.”

3. Strategic Expansion & Store Formats:

Instead of simply adding more warehouse clubs, Costco is expanding into urban micro-store formats and international markets to reach new demographics.

💡 Grocerant Guru® Insight: “Right-sizing expansion is key. Costco isn’t just getting bigger—it’s getting smarter in how it enters new markets and adjusts store formats.”

4. Customer Feedback & Personalization:

Costco listens to members, using data to fine-tune product selection and personalize marketing. Members get targeted discounts based on purchase history.

💡 Grocerant Guru® Insight: “Costco’s ‘personalized value’ approach keeps customers engaged. Even in a warehouse model, members feel like offers are tailored to them.”

5. Consistent Member Benefits & Services:

Beyond groceries, Costco’s gas stations, travel services, and financial products add everyday value to membership, incentivizing renewal.

💡 Grocerant Guru® Insight: “Costco’s ecosystem is more than shopping—it’s lifestyle integration. The more a customer relies on Costco beyond groceries, the harder it is to leave.”

 

Final Thoughts: Costco is Big, But It’s Not Bloated

Is Costco too large? The data and consumer sentiment say no. Unlike bloated retailers that struggle with inefficiencies, Costco maintains its agility by prioritizing value, streamlining operations, and adapting to new consumer behaviors.

"Costco’s size is its strength, not a liability. It scales value, simplifies shopping, and keeps customers engaged across touchpoints—online and in-store. That’s why Costco isn’t just surviving; it’s thriving,” concludes Johnson, the Grocerant Guru®.

Costco’s secret sauce isn’t just bulk buying—it’s an ecosystem of convenience, quality, and price integrity that continues to resonate with modern consumers.

So, whether you shop in-store or online, Costco isn’t just big—it’s built for long-term customer satisfaction.

 

Elevate Your Brand with Expert Insights

For corporate presentations, regional chain strategies, educational forums, or keynote speaking, Steven Johnson, the Grocerant Guru®, delivers actionable insights that fuel success.

With deep experience in restaurant operations, brand positioning, and strategic consulting, Steven provides valuable takeaways that inspire and drive results.

💡 Visit GrocerantGuru.com or FoodserviceSolutions.US
📞 Call 1-253-759-7869

HelloFresh Meals, Meal Kits, make Menu Magic

 

With new avenues of fresh food distribution opening up around the world monthly, weekly, and seemingly daily food retailers must ask themselves one question every Monday morning.  That question is what are we selling, to whom, and where?  That is according to Steven Johnson, Grocerant Guru®, at Tacoma, WA based Foodservice Solutions®.

HelloFresh, was at one time only a Berlin, Germany based meal kit company.  Is doing all the right things according to the Grocerant Guru® because it clearly appears that they are not only asking all the right questions on Monday mornings, but following up with action that is garnering top line sales and bottom-line profits.

Regular readers of this blog know that HelloFresh now has a growing U.S. presence. They are now entering the highly competitive online grocery business today with the launch of HelloFresh Market. So, HelloFresh Market is a digital store that offers customers a range of add-ons to the meal kit order they already receive on their doorstep—from quick meals to pantry essentials, fresh produce and ready-to-heat meals. That will drive incremental sales of Grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared meals according to Johnson.

Uwe Voss, CEO of HelloFresh U.S said during an interview, “Ultimately for us the goal is to move to a broader food solutions group instead of a dinner solutions group,”… “We hope to take customers to other meal occasions. Right now, they receive three to five dinnertime recipes from us, but we don’t have an option for you if you want a solution for lunch, breakfast or complements to dinner such as sides, soups and salads. We know customers are interested in this.”

Winning the Battle for

Share of Stomach

 

This developing business strategy is so important as introduction of HelloFresh Market is part of HelloFresh’s midterm growth strategy, and an important step for the company with ambitions to become “the world’s leading fully integrated food solutions group.” We ask you what are your next steps?  What new avenues of distribution are you going to be expanding your brand?

HelloFresh is aiming to grab a “larger share of the dollar spend,” HelloFresh Market seeks to offer greater value and convenience to customers as a one-stop option for both curated grocery items and mealtime inspiration, Voss stated. Regular readers of this blog know we call this garnering a larger share of stomach.

The HelloFresh Market will launch with what Voss describes as a “very curated set of grocery items.” But the company’s sights are set quite literally on the bread and butter of the grocery business. Which means cherry picking the most requested replenished grocery items.  Basically, they are going to do to the grocery store sector the same thing dollar stores did.  That is be open, upfront, and win market share.

Voss continued, “Our end game isn’t 150 items. We see growing to 1,000 to 2,000 SKUs over time, into items like bread and butter, dairy—high-frequency purchase items, adding that the HelloFresh Market grocery offerings are a “starting point” of items that should feel familiar to customers as they have already enjoyed them in HelloFresh meal kits.

Most food retailers now that know that selling 50 kinds of bread does nothing to drive top-line sales or bottom-line profits. Voss reiterated, “We’re not going to sell 50 types of bread and we don’t want to lose sight of what’s comfortable for our customers who stay with us for frequency of choice,”  “The Market is very curated and fun—just like our cooking experiences.”

The introduction of HelloFresh Market in the U.S. follows the successful launch in the Benelux region, of Europe, where customers could choose from over 150 add-on items to complement their weekly meal kit recipes. Within that region, HelloFresh observed a strong link between the size of the product range and the proportion of customers purchasing add-ons through the Market, which the company will look to replicate in the U.S. As a result, HelloFresh is significantly expanding its product range across categories to provide customers with a variety of items tailored to enhance the shopping and cooking experience.

So, for HelloFresh, the beauty of its meal kit box model is the existing infrastructure to make its expansion into grocery delivery seamless for both the company and its customers.

Voss continued, “Building an exceptional meal-kit experience over the past 10 years has been key to establishing strong market leadership,”. “Through our state-of-the-art supply chain and technology infrastructure, we will provide superior full-service delivery for all meal occasions and capture a greater share of our customers’ overall food budget.”

“HelloFresh is leveraging the box to cover more food occasions,” …“Generally, as a business, we’re always looking to move closer to the customer and shorten the time it takes to get items delivered. With Market, it’s exactly the same as getting a HelloFresh box delivered. We got the whole supply chain taken care of. It’s just a matter of tagging additional high-value items on an existing order. “And it makes economic sense,”

So, how much will all this cost? HelloFresh customers can add grocery items to their meal kit orders without incurring additional shipping charges. “Say, you buy a cheesecake. It doesn’t come at an extra cost. The only thing you pay for is the cost of the cheesecake. We don’t charge extra for shipping according to the statement from HelloFresh.  

The range of HelloFresh Market offerings that will be rolling out to all customers across the U.S. over the coming months. Its curated offerings are categorized into Seasonal Bundles (cheese burgers, baby back ribs and mac and cheese); Quick Meals, Quick Breakfast (cheesy breakfast tacos, kale salad, cheese tortellini with marinara sauce and assorted Intelligentsia coffees); Sides & Complements, Desserts & Treats (garlic bread, gumbo, salads and sweets such as chocolate chip cookie dough and cheesecake); Proteins, Fresh Produce (chicken, ground turkey, apples and avocados); Grains & Pastas & Breads, Cheese (Jasmine rice, brioche buns and ricotta cheese); and Pantry Essentials, HelloFresh Flavors (olive oil, salt, pepper and seasonings).

Add things you know and like will help HelloFresh Market which will feature partnerships with a growing list of high-quality purveyors, such as Epicurean Butter, Pillsbury, Intelligentsia Coffee, Annie’s, Vive Wellness Shots and more, to offer a rotating assortment of new and exciting options, the company said.

HelloFresh has extensive experience in keeping its customers coming back for more. Its customers already rate its meal kit products every week, and Voss said the same ratings will apply to grocery items. “If a recipe doesn’t perform in our meal kits, it doesn’t come back. If there’s not enough interest in a grocery item, we will not continue to carry it.

“Our assortment is going to get more and more powerful because it’s cultivated by our customer,” added Voss. “We have to put a stake in the ground starting with 150 items. Not all 150 will be home runs out of the gate. We’ll continue to go deeper and deeper into what customers like.”

The grocerant niche is filled with Ready-2-Eat and Heat-N-Eat fresh prepared food that is portable, much of which has the halo of better for you around it.  HelloFresh Market is focused you garnering a larger share of stomach.  We think they are the right track.

Invite Foodservice Solutions® to complete a Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869

Chipotle Mexican Grill Menu Music is ‘Better for you’

 

At the intersection of food that has the halo of ‘better for you’, music, and brand relevance Chipotle Mexican Grill is once again elevating it brand messaging, creating new electricity with its core users according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions.  

So, when Chipotle Mexican Grill announced that it was partnering with Shawn Mendes and the Shawn Mendes Foundation to launch "Wonder Grants" supporting young innovators in sustainability, as well as a "Shawn Mendes Bowl" on the Chipotle app and Chipotle.com for a limited time in the U.S. and Canada.  You know, that it was a brand invitation, that would be gobbled up, according to Johnson.

Now get this for every Shawn Mendes Bowl sold, Chipotle will donate $1 toward the Shawn Mendes Foundation in support of changemakers that is good and extend the brand ‘halo’ to a new subset.  The new digital menu item features Cilantro-Lime Cauliflower Rice, the brand's latest menu innovation that was launched earlier this month like we said before this is ‘better for you’ and that is a good thing.  So, in short Chipotle has a daily double of proactive messaging that will resonate with its core customers.

(Shawn Mendes Bowl: Cilantro-Lime Cauliflower Rice, black beans, chicken, roasted chili-corn salsa, romaine lettuce, and guac).  This marks the first time Chipotle has launched a philanthropic entrée on its menu. It’s a great idea and one sure to drive new electricity.

When Chipotle and Shawn Mendes begin awarding "Wonder Grants" to young activists focused on sustainability that halo will continue expanding the brand messaging. The "Wonder Grants" are designed to help young changemakers with big ideas but insufficient resources to launch or complete innovative projects across a range of fields including music, film, activism, education, science, environment and technology. How are you driving new electricity into your brand?

This partnership with a music icon company will drive new electricity, top-of-mind brand awareness, top-line-sales, bottom-line-profits, all while edifying store unit metrics according to Johnson.

Johnson stated “that in my minds-eye the new electricity must be very efficient for the supply chain and includes such things as; corporate partnerships, fresh foods, online ordering, delivery, self-driving cars, plant-based foods, music, streaming, food sampling, toy’s, podcast, movies, cereal, developing brands, grocerant positioning, fresh food messaging, autonomous delivery, cashier-less retail, plates, glasses, cash-less payments, digital hand-held marketing.

All food and beverage retailers to survive the next generation of retail must embrace the artificial intelligence revolution while simultaneously embracing fresh food and beverages that are portable, fresh, with differentiation that is familiar not different and Subway fits that bill according to Johnson.

So, to learn more about the Shawn Mendes Foundation, fans can visit www.shawnmendesfoundation.org . The sustainability Wonder Grant recipients will be announced in the coming weeks.

Shawn Mendes stated, "It is important to me to partner with a company that values sustainability – I'm excited to partner with Chipotle and appreciate their support for my Foundation and young changemakers who are leading the charge in these crucial efforts,"

Chris Brandt, Chief Marketing Officer at Chipotle stated, "We are thrilled to partner with Shawn Mendes and use the power of our real food to back the next great innovations in sustainability," … "Together with Shawn's team and our passionate fans, we continue to pursue our mission of cultivating a better world."

In 2021, ‘better for you’ is going to be a big thing according to Johnson. Chipotle understands that and is also introducing a new extension of its Real Foodprint feature that will allow fans to view the cumulative potential impact of all their Chipotle orders, as compared to orders using conventional ingredients, in one comprehensive dashboard on the Chipotle app and Chipotle.com. Real Foodprint, introduced in October 2020, is a sustainability impact tracker that uses data provided by HowGood to compare average values for each of Chipotle's real ingredients to their conventional counterparts against five (5) key metrics.

The Real Foodprint computed for a Shawn Mendes Bowl is:

Less Carbon in the Atmosphere

1.4 grams

Gallons of Water Saved

1.7 gallons

Improved Soil Health

1.8 sq ft

Organic Land Supported

1 sq ft

Antibiotics Avoided

42.3 milligrams

At the conclusion of the campaign, Chipotle will share a Real Foodprint for all Shawn Mendes bowls ordered to demonstrate the potential impact of his ingredient choices at Chipotle on the environment and animal welfare.

Are you looking for a new Out of the Box  partnership to drive sales? Are you ready for some fresh ideations? Do your food marketing tactics look more like yesterday that tomorrow?  Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may have the clue you need to propel your continued success.