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Six Secrets Truckstop Operators Can Learn from Costco’s Success

Posted in: Truckstop Business, Marketing & Retail

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NATSO members often look at the best practices of their fellow operators, but it is important to also look at the entire retail, food and fueling landscape.

One of the continuing shining stars in today's current retail environment is Costco. While much of today’s retail landscape is driven by the growth and convenience of e-commerce, Costco is continuing to thrive.

Here are six key ingredients that contribute to the retailer’s winning recipe of success.

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Limiting SKUs:  Costco warehouses only carry about 4,000 SKUs (stock keeping units) compared to the 30,000 found at most supermarkets. Costco’s website reports that products are chosen carefully "based on quality, price, brand, and features."

In our industry, we have a majority of travel centers that have more that 4,000 stocked SKUs. It makes you wonder who you are trying to be. It is important to carefully consider each item you stock, eliminate trade downs and remove duplicates. 

Emphasizing Culture: Costco is built on a culture that values passion, pride, integrity and treating its employees right, according to the article How Costco’s Obsession with Culture Drove its Success. James Sinegal, who founded Costco in 1983 and was CEO until his retirement in 2011, worked hard promoting passion, integrity, ownership and motivation in his employees and ensuring that customers could trust that they are always getting the best deal. 

Focusing on Employees:  Costco has been recognized several times for being a top employer. What’s more, Costco is often noted for being much more employee-focused than other Fortune 500 companies. By offering fair wages and top-notch benefits, the company has created a workplace culture that attracts positive, high-energy, talented employees, the company said.

Utilizing Private Labels: Customers love Costco’s Kirkland Signature private label brand, and it has the sales to prove it. Last year, the products brought in nearly $40 billion, an 11 percent increase from 2017. Kirkland, which Costco sells for at least 20% cheaper than national brands at its warehouses, helps the club keep prices low even on the products it doesn't make, CNN reported

Most importantly, customers know they can trust the Kirkland Signature brand and are willing to buy it. Costco has even told its investors that sales and profit margin would suffer if Kirkland "experiences a loss of member acceptance or confidence.” 

Speed-of-Service: Anyone who is a Costco member knows the lines can get long, but the employees at the register keep things moving. They are quick to flip items over in the cart to access the bar code and efficient with their scanning. Costco is also testing out self-serve kiosks in the food court at some locations to help customers get in and out even faster.

Being Known for Something: Costco often swaps out its SKUs, bringing in new items and pulling others, but there are some items that have remained consistent. One of those items is its $5 rotisserie chickens. Costco uses their rotisserie chicken to keep customers happy and to increase foot traffic in the stores. The company sells 60 million of the savory ready-made chickens under its in-house Kirkland brand every year and has sold $4.99 rotisserie chickens since the chain first opened in 1985. The chickens are a customer favorite and Costco has said it has no plans to discontinue the offering.

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About the Author

Darren Schulte

Darren Schulte

Darren Schulte serves as Vice President of Membership at NATSO. In this role, he directs recruitment, retention and customer service for truckstop and travel plaza members. He is also responsible for developing NATSO products and programs, particularly those relating to education, research and training for truckstop and travel plaza operators.

Schulte also leads NATSO's Profitable Retail Review program. A Profitable Retail Review is a custom assessment of your truckstop, including recommendations for every aspect of your facility, from actionable ideas to improve revenue to tactical ways to improve your net operating costs. Learn about NATSO's Profitable Retail Review program here.

Schulte joined NATSO with nearly three decades of experience in truckstop and travel plaza operations and merchandising. Schulte has worked for: 

  • Love's Travel Stops and Country Stores,
  • HESS Corporation, 
  • Petro Stopping Centers, and
  • TSC Global/Barjan LLC.