• Costco retains nearly 90% of its members.
  • The warehouse club has taken new steps to keep prices down in the wake of uncertainty caused by tariffs.
  • Costco has leaned into a member favorite.

Costco has a hold on its members. People join and very few don’t renew their memberships.

The actual numbers are staggering.

“In terms of renewal rates at Q4 end, our U.S. and Canada renewal rate was 92.3% and the worldwide rates came in at 89.8%,” shared CFO Gary Millerchip said during the chain’s fourth-quarter earnings call.

That’s actually a slight decrease, which the CFO explained.

“The decline in renewal rates was largely attributable to a higher number of online sign-ups entering the renewal rate. And this quarter included a large Groupon campaign in December 2023 entering the calculation,” he shared.

Millerchip noted that overall membership has increased.

“New member sign-ups continue to be strong, and we ended the fiscal year with 81 million total paid members, up 6.3% versus last year, and 145.2 million cardholders, up 6.1% year-over-year,” he said.

The CFO is pleased with the numbers.

“Overall, we view the growth in online sign-ups as a net positive as they are helping to grow our overall membership base and membership revenue and are also introducing younger members to Costco. Almost half of our new member sign-ups are now under the age of 40,” he added.

Now, Costco has a new plan to keep its members happy that involves doubling down on its beloved house brand, Kirkland Signature.

Costco sees house brand as leverage

Kirkland Signature has never been a traditional house brand. Instead, it’s kind of a relationship-built brand between Costco and its members who know that the house brand offers the same quality as the name brands on the warehouse club’s shelves.

Millerchip sees an opportunity to add more Kirkland Signature products as Costco looks at ways to offset the uncertain cost increases caused by President Donald Trump’s tariffs.

“Our view on Kirkland Signature is that it’s all about delivering quality, value and innovation for members. And if we see examples where there are gaps for our members, where we think there’s items that we can deliver that value and quality that doesn’t exist today, then we’re — that’s what we’re doing and how we’re innovating and delivering new products for our members,” he shared.

The CFO made it clear that the Costco will take its house brand where it’s needed.

Costco, Millerchip noted, also gives the warehouse club leverage when negotiating with major brands.

“And of course, we love working with national brands as well to develop and grow those partnerships. But Kirkland Signature also provides a sort of healthy tension there to make sure that, that value and quality is there for our members,” he added.

The plan, he shared is to grow the Kirkland Signature brand.

“And so we’ll continue to innovate and grow those items where we think we can deliver that value for the member. And it’s certainly, over the last few years, has continued to grow in penetration because of the great work our teams have done in building out those items and delivering that value for the member,” he said.

Costco continued to invest in its Kirkland Signature house brand.

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Why Kirkland Signature has worked so well for Costco

“The centerpiece of Costco’s Kirkland brand strategy is trust. Costco works hard to ensure that the manufacturers meet high quality standards for their Kirkland brand. Quality products further build the trust as it extends across categories,” RetailWire Brain Trust member and author Mark Ryiski wrote.

Stephen Needel, another Brain Trust member, agrees.

:We are big Kirkland fans and the reason is simple – mostly great products at very good prices. Their laundry detergent and dishwashing pods have been at the top of Consumer Reports for years in terms of effectiveness, yet they are at a substantial discount. Their Sauvignon Blanc and Prosecco may never win awards, but it’s hard to beat drinkable wines at those price (not to mention the Rioja, Chianti, and Malbec). And they have mixed nuts at half the price of Planters. I could go on forever,” he added.

Katie Thomas believes Costco’s house brand succeeds due to more than price.

“For consumers, price is both the most and least important factor. In reality, what they are looking for is a rather nebulous “fair price” – a price that matches the quality. As Costco highlights, Kirkland does just that – good quality at a competitive price. I’d say that’s the obvious reason for the success,” she wrote.

Kirkland Signature timeline:

  • In the early 1990s, Costco Wholesale Corporation was managing numerous private‑label brands across different categories and saw rising prices in national brands as well as increasing consumer acceptance of store‐brands.
    Source: Chowhound
  • The idea emerged to consolidate all private‐label offerings under a single universal brand that could be used across all categories and markets.
    Source: Store Brands
  • The name “Kirkland Signature” was chosen in 1995. The company considered “Seattle Signature” but could not clear the trademark, so it used “Kirkland” (the city in Washington where Costco’s headquarters had been) instead.
    Source: KTVZ
  • In October 1995, Costco officially launched the Kirkland Signature line with about two dozen items including chocolate chip cookies, cranberry juice, diapers, sweaters and even tires—spanning grocery and non‐grocery.
    Source: Supermarket News
  • From the outset, the brand was positioned as offering “as good as or better than leading national brands” but at a significant discount (often 20% lower price).
    Source: Costco Wholesale
  • The unified brand gave Costco cost efficiencies with fewer separate packaging/branding programs, simpler legal/clearance issues (one global brand across many product categories).
    Source: WRAL.com
  • Over the next decades, Kirkland Signature expanded into dozens of categories, groceries, apparel, household goods, pet food, fuel, etc.
    Source: Costco Wholesale
  • By 2021, the brand accounted for roughly 31 % of Costco’s total revenue with sales exceeding US$59 billion.
    Source: RetailWire
  • In recent years (2024 and beyond) the brand’s sales are estimated at tens of billions more (estimates in the $70‑$80 billion range) and it is recognized as one of the largest private‐label brands in the US retail industry.