Costco: Customer-Focused Solutions for Long Checkout Lines — A Good Problem to Have

 

Let’s be honest — when your biggest problem is too many customers, you’re doing something right. Walk into any Costco on a weekend and you’ll see the signs of success stacked high: full carts, long lines, and packed parking lots. But even success comes with challenges, and long lines at checkout are a friction point that Costco isn’t ignoring — because that’s not the Costco way according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

In the ever-evolving world of retail, the retailers who win are the ones who stay laser-focused on customer experience. And Costco? They've made it an art form.

So, how does a company that's bursting at the seams with loyal customers stay true to its roots while solving for high demand? More importantly, why will Costco continue to be a retail giant for years to come? Let’s take a look.

 

The Long Lines: A Byproduct of Value and Loyalty

Costco's popularity is no accident. Their business model — low margins, limited selection, and high value — has created a fiercely loyal customer base. But that same loyalty can result in customer pain points, especially at checkout.

That said, Costco isn’t ignoring the issue. They’re leaning into customer feedback and deploying smart solutions:

·       Additional self-checkout stations

·       Mobile scanning and digital receipts pilots

·       More staffing during peak times

·       Streamlined packaging to speed up the checkout process

They’re not perfect, but they’re adapting — and that’s key.

 

Why Costco Will Keep Winning: 5 Reasons They’re Built for Long-Term Success

1. Customer-First Culture

From free samples to generous return policies, Costco has built its brand on trust and value. When lines grow long, they don’t shrug it off — they fix it. They know the customer isn’t just always right — the customer is the reason.

2. Disciplined Pricing Strategy

In an era of price creep, Costco stands tall. Their famous $1.50 hot dog and soda combo hasn’t changed in decades. Why? Because it’s a symbol of their commitment to affordability — and customers notice.

3. Efficient, No-Frills Store Design

There’s a reason you don’t see fancy signage or flashy decor in Costco. Every element of their warehouse design is engineered for efficiency, cost savings, and ultimately, lower prices for the consumer.

4. Strategic Technology Investment

Costco isn’t flashy with tech — they’re strategic. Mobile app enhancements, digital membership cards, and future-facing checkout innovations show that they’re evolving with their customer’s expectations, not chasing trends for headlines.

5. Loyalty Built on Value, Not Gimmicks

Unlike many retailers who rely on deep discounting and rotating promotions, Costco’s model is simple: everyday value. That creates a different kind of loyalty — one that lasts. The lines at checkout are a direct result of this loyalty, and it’s the kind of problem most retailers would love to have.

 

Think About This

Yes, long lines at checkout can be frustrating. But when they’re a symptom of delivering unmatched value, they also tell a powerful story. Costco's response to those lines — rather than the lines themselves — is what sets them apart.

They listen. They adjust. And they never forget who they serve.

As the Grocerant Guru®, I’ve seen trends come and go — but customer obsession is always in style. And in that category, Costco remains king.

Outsourced Business Development—Tailored for You

At Foodservice Solutions®, we identify, quantify, and qualify new retail food segment opportunities—from menu innovation to brand integration strategies.

We help you stay ahead of industry shifts with fresh insights and consumer-driven solutions.

🔗 Connect with us on social media: Facebook, LinkedIn, Twitter

Ready to Find Your Next Success Clue?

We specialize in outsourced food marketing and business development ideations—helping brands seize opportunities in food retail, technology, and menu innovation.

📩 Reach out today: Steve@FoodserviceSolutions.us
🔗 Follow us: Facebook, LinkedIn, Twitter

You are Kidding Me Millennials Like Sam’s Club

 

What goes around comes around. The parents of Millennials drove the growth and success of Club stores the ilk of Costco, BJ’s, and Sam’s Club according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions® who stated, now that Millennials are getting married, buying homes and starting families they are following in the footsteps of their parents and flocking to or ordering from Club stores more and more. 

Success does leave clues, so after Sam's Club ran its Super Bowl ad, hundreds of thousands of members joined Scan & Go. Thus, Sam’s Club is doubling down on efforts to digitally engage with its members, and it sees Scan & Go technology as a key component of that strategy. Millennials were the first generation to be digital natives and Gen Z is the second.

According to Sam’s club spokesperson, what is helping drive record sales has been the company’s success in attracting a subset of digitally savvy Millennial members during the pandemic. These consumers are also strongly represented in what Kathryn McLay, president and CEO of Sam’s Club, termed their new Super Bowl cohort — the subset of consumers who became members thanks to the retailer’s wildly popular Super Bowl Ad.

Get this the ad starring Kevin Hart, the ad sought to “concierge” consumers through Scan & Go, said McLay during a Shoptalk keynote in Las Vegas on March 27, as it’s often mistaken for self-checkout technology. Scan & Go, which the exec described as one of the highest NPS products in retail, enables members to pay for items through a mobile app linking their membership information.

Kathryn McLay, president and CEO of Sam’s Club, stated, "We know our members who use it, renew with us,”,… and the floodgates opened by the third day of airing the ad, with hundreds of thousands of members joining.

How are you evolving your brand with relevance? Engaging in a digital-first manner is requiring the retailer to think beyond straightforward journeys. Discovering member resistance toward downloading yet another app, Sam’s Club instead deployed a digital demo in which consumers can scan a QR code to trial a single instance of Scan & Go — later downloading the app if they wish to commit.

McLay continued, “It's just a different way of playing with the tech to make it more accessible to more members,”…  "We’re beginning to play with some of those concepts, but all of that is based on having this open dialogue with a member online while they're in an offline club.”

Millennials can be reached at the intersection both physical and digital experiences.  Where Sam’s can then identified offers they can prompt members with for further engagement, including engagement in different categories.

McLay also shared insight into how Sam’s Club is leveraging learnings from its Scan & Ship technology, in which consumers scan bulky items with their phones for direct-to-home shipping. Though they initially assumed consumers would ship items immediately after scanning, they instead found consumers will let them sit in baskets for up to 30 days, later returning to purchase them after doing research.

There’s an opportunity to use this process for such things as Halloween costumes, said McLay, a category that’s historically difficult to keep stocked in every size. 

Also on the horizon: Further advancement with robotic inventory analysis. Though Walmart has walked away from the technology in its stores, McLay said it works well in Sam’s Club in part because of their limited-SKU design with pallet flows and displays.

Available at nearly all 600 locations, the camera-affixed automated floor scrubbers scan inventory levels each day. Not only are the scrubbers “automating a role that’s asking to be automated,” she said, but they’re also providing an extraordinarily accurate inventory rate and freeing up associates’ time.  

The robots are currently able to scan both tags on the floor and in the racks, and the company is exploring RFID technology so it can read the apparel tables as well. How is your brand evolving? Digital natives continue look for new different experiences including food discovery.  They may not want all of the old brands, or want to cook from scratch but they do want a shared experience both physical and digital.

Foodservice Solutions® team is here to help you drive top line sales and bottom-line profits. Are you looking a customer ahead? Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us 

Grocerant Niche Fresh Food Disruption Expanding

Restaurant chain year over year customer counts continue to decline according to all reports including traditional restaurant trade magazines which do not to report bad news about the industry they cover and seek advertising for.

Battle for Share of Stomach

Bob Goldin, a Pentallect stated, “nontraditional channels represent a ‘sweet spot’ in the food and beverage industry. Their growth is based upon strong consumer appeal and generally favorable business models.” Pentallect President Rob Veidenheimer observed that “each of the channels has unique consumer appeal and continues to evolve at a very rapid rate. We have studied these channels closely over the past several years and see them as significant share gainers for the foreseeable future.”

Pentallect, conducted comprehensive research and analysis into 10 nontraditional channels – club stores, community-supported agriculture (CSA), ethnic/neighborhood stores such as bodegas, farmers’ markets, food trucks, limited-assortment stores, meal kits/home-delivered meals, online, specialty stores such as bakeries and butchers, and Trader Joe’s, gleaning insights from more than 1,000 consumers and trade sources.

While others talk about Grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food, Foodservice Solutions® Grocerant ScoreCards were the first to identify, quantify, and qualify the niche, the success and the unique was in which your brand can successfully ‘Look A Customer Ahead’.  Success does leave clues stop capitulating year over year customer counts. 

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

Grocerant niche Fresh Food Drives Service Deli Sales

Once again success does leave clues this time its within the withering grocery sector.  In the service deli has become a central focus of customer migration from restaurants to the grocery sector according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Time-starved and always looking for ways not to have to cook dinner the grocery store service deli has become a hot spot of dinner solutions according to Johnson. Legacy grocery stores and supermarket deli’s have gone through an evolution increasing globally inspired hot and cold food bars with bold flavored foods that can be mix & matched into a customized family meal faster than ordering a meal through a fast food drive-thru.

In a new report published in Progressive Grocer titled 2018 Retail Deli Review, found:

1.       Seventy-two percent of respondents say that their overall deli sales, including prepared foods, grew in 2017 — that’s 2 percent more than those who cited sales growth in 2016.

2.       Larger operators (those with more than 10 stores) have fared particularly well, with 81 percent reporting an increase in sales. Of those retailers who reported an increase, the average sales gain was 8.2 percent.

3.       In total, deli department sales now account for almost 15 percent of all supermarket sales, according to the survey, with independent operators (those with 10 or fewer stores) seeing their average total sales closer to 10 percent.

4.       Retailers’ average deli gross margin was 43.9 percent, with labor accounting for almost 20 percent of sales, and shrink coming in at a more manageable 5.6 percent of sales.

5.        Seventy percent of respondents say that they dedicated more selling space to fresh prepared foods in 2017. Moreover, half of chain respondents say that they increased space significantly.

Are your sales growing at 8.5% plus?  Are your customer counts increasing? Is your restaurant drive-thru delivering on consumers expectations of What’s for Dinner in 2019?

Interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization? Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information.

H-E-B faces the Grocery store Conundrum Restaurant or Fresh Prepared Food

Many legacy grocery stores simply do not understand the consumer according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Regular readers of this blog know that Johnson believes that category managers have destroyed the grocery shopping by looking at what was sold in the store and its profitability while ignoring what customers are buying and at what price in other retail foodservice channels. 

Consumers in Texas where H-E-B is located are just like the consumer around the US according to Foodservice Solutions® Grocerant ScoreCards.  The team at Foodservice Solutions® was wondering out loud why in the word did H-E-B open a restaurant ‘taco shop’ inside one of their stores.  As outside observes they speculated that H-E-B opened the restaurant because their store are simply to damn big and/or the category managers can’t find enough food to sell customers or slotting fees to break even.

The “grocerant” trend is not just about restaurant sales it is about Ready-2-Eat and Heat-N-Eat fresh prepared food that consumers can buy in single, or family sized portions and mix and match meal components into a perfect family meal. 

It just might be time to talk about Ready-2-Eat and Heat-N-Eat fresh prepared food.  That is not food that is made in a commissary and scooped out of a bucket for two weeks and sold a fresh.  Today consumers can tell the difference.  Fresh is onsite or a regional kitchen that makes and distributes fresh food daily.  It is not meant to come in sealed plastic buckets, sit on the shelf for 6 weeks then be scooped out. That is not grocerant fresh food too consumers today.

Restaurants sales per square foot range on average from $525 to $580 dollars per square foot.  Yes, there are exceptions but it does not make much of a difference if it is a fast food format, fast casual, or full service the sales per square foot remain within those average.  My point is we have no problem with what the concept is we have a problem with the fact that most grocery stores don’t first make a serious effort to integrate a quality fresh prepared food program selling meal components before opening a restaurant.

Most regular readers of this blog remember what we said when Hy-Vee opened Wahlburgers. You have to understand that Hy Vee also has very large stores kinds makes you wonder just how Hy-Vee will integrated Wahlburgers brand values into their store.  We ask after one year will Walhburgers in Hy-Vee exceed the volumes of those outside / not in Hy-Vee?

In the last 12 years there are now 47% fewer traditional grocery stores in the US.  At the same time there are now 31 restaurants in the US for every grocery store.  Restaurants have problems of their own and restaurant customer counts remain flat.  Restaurants are not the solution to solving grocery store customer migration.  Success does leave clues and the team at Foodservice Solutions® has the clues and understand that a new business model is required if legacy grocery stores intend to regain foodservice importance.  Are you looking at what you sell or do you know what your customers are eating and where and why?

So just what is your New Electricity? Success does leave clues www.FoodserviceSolutions.us  is the global leader in grocerant niche business development.  We can help you identify, quantify and qualify additional food retail segment opportunities.  Has your company had a Grocerant ScoreCard completed a Grocerant Program Assessment, or new Grocerant niche product Ideation?  Want one?  Call 253-759-7869 Email: Steve@FoodserviceSolutions.us