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Author: newsreporter Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 3638  
Subject: The Rising Retailer Date: 12/16/2012 4:29 AM
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http://seekingalpha.com/article/1065771-costco-the-rising-re...

During the holiday season, most successful retailers see an overall boost in sales and revenue due to increased consumer spending. One could assume that a retailer that did not adhere to this trend would probably be struggling, because during this time period many retailers can generate up to 30% of their annual revenue. However, this is not the case at all when it comes to Costco (COST). Costco operates differently than most retailers, but still finds itself outdoing competitors. Costco's different business approach is perhaps what makes it an appealing buying target over traditional retailers such as Wal-Mart (WMT), Target (TGT), and Dollar General (DG).

During the holiday season, Costco only generates about 18% of its annual revenue, while most retailers generate close to double that amount. How does Costco keep up with these other companies? Costco provides a substantially lower price (about 10% lower than most retailers) on many of its goods year-round, so customers are more likely to purchase items from it rather than other retailers. This strategy allows Costco the flexibility to not have to be open on the holidays, and to give their employees those days off. This strategy is the opposite of other retail giants that try to attract the biggest crowds possible during the holiday seasons (e.g., Wal-Mart). We have all seen the problems occurring with other retailers and their employees feeling mistreated. Perhaps Costco has it right with its business model of treating its employees well and offering higher wages and more benefits.
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