Inside America's Costco economy

RetailInside America's Costco economyA retailer once built around broad middle-class value is now powered overwhelmingly by its most affluent, most loyal, most economically insulated membersByCatherine BaabPublished 17 hours ago|Updated 12 hours agoShare to XShare to FacebookShare to RedditShare to EmailShare to LinkScott Olson/Getty ImagesCostco’s latest earnings were strong across almost every major metric. But they were particularly strong amongst one crucial demographic: The company’s “Executive Members” now account for a whopping 74.3% of all Costco sales, ticking up slightly from last quarter.

These Executive Members are Costco’s whales — affluent, high-frequency shoppers who pay twice the annual fee and who earn 2% cash back on purchases, which drives them to spend more per trip than regular members. Their dominance increasingly explains both Costco’s business and a key truth about the larger consumer economy. A spending phenomenon decades in the makingCostco launched the Executive program in 1997, when only a small fraction of members upgraded. Through the 2000s, Executive sales penetration hovered well under half. By the mid-2010s it pushed into the low 60s, and in the 2020s it climbed steadily toward today’s almost 75%. No other metric captures Costco’s transformation as clearly: A retailer once built around broad middle-class value is now powered overwhelmingly by its most affluent, most loyal, most economically insulated members.You can see their fingerprints all over the quarter. Costco delivered a record $250 million in Black Friday e-commerce orders, a 20% jump in digital comps, and holiday food volumes that bordered on surreal, including 4.5 million pies sold in the three days before Thanksgiving and 358,000 pizzas served over Halloween weekend. They’re price-conscious, clearly, but they’re not distressed. This is celebratory bulk consumption by households with money, SUVs to tote their hauls away, and McMansion-size pantries in which to store them.Costco’s much-touted price cuts — bacon down to $16.99, three-pound bags of walnuts to $12.99, pot pie below four dollars a pound — play into the same psychology. These shoppers aren’t trading down, just trading smart. And the wealth effect helps explain the strength of their spending.

As The Wall Street Journal recently noted, people tend to spend $35 to $50 for every $1,000 their stock portfolios rise — not necessarily because they cash out gains, but because higher asset values make them feel secure enough to spend.Federal Reserve Chair Jerome Powell described this divide in plain terms earlier this week: “If you listen to the earnings reports for consumer-facing companies that deal with low- and moderate-income people, they’ll all say that we’re seeing people tightening their belts, changing products they buy, buying less. And it’s clearly a thing. It’s also clearly a thing that asset values—housing values and securities values—are high, and they tend to be owned by people at the higher end. Most of the consumption does happen by people who have more means. The top third accounts for way more than a third of the consumption.”A mass arbitrage opportunity, a wealthy mindsetCostco’s whales are exactly those "top third" people Powell described as driving consumption. The U.S. housing market may be softening a little in late 2025, yet post-pandemic gains remain huge. Since 2020, the total value of the market has climbed almost 60%, adding roughly $20 trillion in homeowner wealth. Layered on top of that is the enormous advantage enjoyed by households still sitting on ultra-low mortgage rates. Those loans enable arbitrage at scale, with people effectively borrowing at 2-3% while their homes appreciate around 6-10% a year and their stock portfolios deliver returns north of 10%. The big fat spread? It flows right into discretionary spending.Over roughly the same period, the S&P 500 has climbed about 90%, with the Nasdaq posting similar gains. Consumers with home equity and stock-market exposure — via 401(k)s, IRAs, and brokerage accounts — aren’t just wealthier on paper. They’re wealthier in their own minds and their spending shows it, all the more so relative to lower-income Americans. For Costco’s whales, the combination of cheap debt, soaring asset values and strong portfolio returns has translated into real spending power. And that’s worth celebrating with Kirkland Signature Crème Brulee Bar Cake — and perhaps a little Kirkland Signature Champagne Brut, too.📬 Sign up for the Daily BriefOur free, fast and fun briefing on the global economy, delivered every weekday morning.Sign me upThe Palatial: 3.5, 4.5 BHK Luxury ResidencesNew Launch: 3.5, 4.5BHK Homes starting @ ₹4.96 Cr*, Dwarka E-way.Hero Homes | SponsoredSponsoredLearn MoreUndo4.5BHK Homes starting @₹6.05 Cr*, New LaunchNew Launch: 3.5, 4.5BHK Homes starting @ ₹4.96 Cr*, Dwarka E-way.Hero Homes | SponsoredSponsoredLearn MoreUndoServiced Apartments by Hiranandani Coming Soon to AlibaugFully Furnished Serviced Apartments with Assured Rentals by Hiranandani Communities Now Coming Soon to AlibaugHiranandani Exclusive | SponsoredSponsoredLearn MoreUndoHiranandani Coming Soon to Alibaug With Assured RentalsFully Furnished Serviced Apartments with Assured Rentals by Hiranandani Communities Now Coming Soon to AlibaugHiranandani Exclusive | SponsoredSponsoredLearn MoreUndoMountain Gear for Extreme ConditionsShop the best in outdoor gear and apparel. High-altitude jackets, trekking boots, and more for your next adventure.Trek Kit India | SponsoredSponsoredLearn MoreUndoPrateek Grand Begonia Siddharth Vihar, GhaziabadLuxury 2 & 3 BHK Apartments from Rs.1.30 Cr* At Siddharth Vihar, GhaziabadPrateek Group | SponsoredSponsoredBook NowUndoOption Trading: Mr.

Gopal Reveals His Powerful Laxman Rekha Strategy For FreeMaster the Art of Precise Option Trading with Gopal Sir's Laxman Rekha Strategy – for Free!TradeWise | SponsoredSponsoredLearn MoreUndoToothsi invisible teeth aligners, now at flat 15k off!Enjoy free Electric toothbrush & Teeth whitening pen worth 5KToothsi by MakeO | SponsoredSponsoredBook NowUndoStart Forex Trading. Get a 100% Welcome BonusFind out why you should join iFOREX, a regulated broker with over 25 years of experience. Open your iFOREX account and enjoy a 100% Welcome Bonus. Sign up today!iFOREX | SponsoredSponsoredSign UpUndo3 Lakh+ Have Transformed Their SmileDon’t settle. Fix your smile like 3L+ others. Backed by 2K+ dentists, FDA-cleared, starts ₹2485/month.Toothsi by MakeO | SponsoredSponsoredBook NowUndoOption Trading Mastery: Mr.

Gopal Shares His Laxman Rekha Strategy For FreeMaster the Art of Precise Option Trading with Gopal Sir's Laxman Rekha Strategy – for Free!TradeWise | SponsoredSponsoredLearn MoreUndoSpecialist Down Jackets for Ultralight AdventuresWeightless warmth for when every gram matters. Built for brutal. Lighter than logic. All function, no frills. Get your high-performance down jacket today!Trek Kit India | SponsoredSponsoredLearn MoreUndoPlay War Thunder now for freeFight in over 2000 unique and authentic Vehicles. Fight on Land, on Water and in the Air. Join the most comprehensive vehicular combat game. Over 2000 tanks, ships and aircraft.War Thunder | SponsoredSponsoredPlay NowUndoThe rise of the 4-letter baby nameQuartzUndoElizabeth Holmes' prison sentence keeps getting shorterQuartzUndoJoin new Free to Play WWII MMO War ThunderFight in over 2000 unique and authentic Vehicles. Fight on Land, on Water and in the Air. Join the most comprehensive vehicular combat game. Over 2000 tanks, ships and aircraft.War Thunder | SponsoredSponsoredPlay NowUndoShooter Action MMOCheck out the new Crossout 2.0 for free. Discover PvP and PvE in our upgraded Action MMO. Countless unique Vehicles, PvE and PvP, Trading. Are you ready? Destroy vehicles your opponent took hours to craft and enjoy. Join now for FreeCrossout | SponsoredSponsoredPlay NowUndoAlways Put a Plastic Bottle on Your Tires when Parked, Here's WhyCleverst | SponsoredSponsoredUndoExploring Dubai Luxury Villas: A Buyer’s GuideLuxury Dubai Villas | SponsoredSponsoredLearn MoreUndoYour fingers can tell you a lot about your personality. What kind of fingers do you have?Tips and Tricks | SponsoredSponsoredUndoMOST POPULARThe awful truth of donating a dead body to “science”QuartzUndoMOST POPULARWhen John McCain called Putin a “thug and a murderer,” this is what he was talking aboutQuartzUndoWhat Is An Insulated Prefabricated House And How Much Does It Cost? (View)freshfacture | SponsoredSponsoredRead MoreUndoTravel Made Easy. Find all your travel needs on Traveloka!Traveloka | SponsoredSponsoredBook NowUndoOpen an account today!React immediately to market-moving news and trade when it’s convenient for you.