Costco Wholesale Corporation (COST): ANSOFF MATRIX [Dec-2025 Updated]

You're looking at a behemoth, and honestly, figuring out where a company that hit $269.9 billion in net sales in fiscal 2025 goes next is the real challenge. My two decades in this game, including leading analysis at a major firm, tells me their playbook isn't about wild bets; it's about disciplined execution, like pushing that executive membership past 47.7% or capitalizing on the 15.6% e-commerce jump. Still, even with a 92.3% renewal rate, growth needs structure, so we've mapped out their four clear paths-from opening 26 net new warehouses to expanding Kirkland Signature-to see exactly where the next big returns will come from. Dive below to see the disciplined, data-backed strategy for the next phase.

Costco Wholesale Corporation (COST) - Ansoff Matrix: Market Penetration

Drive Executive membership growth beyond 47.7% of paid members.

At the close of fiscal 2025, Costco had 38.7 million executive memberships, which represented 47.7% of total paid members. This premium tier drove 74.2% of worldwide sales for Costco Wholesale Corporation. Paid memberships totaled 81 million at the end of the fiscal year, marking a 6.3% increase. Membership fee income increased 14% year-over-year in the fourth quarter of fiscal 2025, reaching $1,724 million.

Increase e-commerce sales, which grew 15.6% in FY2025, through better digital integration.

Costco Wholesale Corporation e-commerce sales grew 15.6% for the full fiscal 2025. These digital sales exceeded $19.6 billion in fiscal 2025. This represented 7.26% of Costco Wholesale Corporation total sales in fiscal 2025. In Q4, site traffic increased by 27%.

Leverage the co-branded credit card program to boost in-warehouse and gasoline spend.

The co-branded Visa card incentivizes spending through tiered rewards:

• Earn 5% cash back on gas at Costco.
• Earn 4% cash back on other eligible gas and electric vehicle (EV) charging purchases.
• The 5% and 4% gas/EV charging rewards apply to a combined spend of the first $7,000 per year, then drop to 1%.
• Earn 3% cash back on restaurants and eligible travel.
• Earn 2% cash back on all other purchases from Costco and Costco.com.

Maintain the US/Canada renewal rate of 92.3% by reinforcing value perception.

The membership renewal rate in the US and Canada stood at 92.3% at the end of fiscal 2025. The worldwide renewal rate was 89.8%.

Open new warehouses in existing, underserved US metropolitan areas.

Costco Wholesale Corporation projected the opening of 29 new warehouses during fiscal 2025. The company opened 27 new locations in fiscal 2025. Specifically, 10 new warehouses were opened in Q4. For the next fiscal year, Costco plans to add 35 more warehouses in fiscal year 2026. In November 2025, 5 new locations opened globally, with 4 in North America.

Here is a snapshot of key fiscal 2025 metrics related to Market Penetration:

Costco Wholesale Corporation (COST) - Ansoff Matrix: Market Development

Costco Wholesale Corporation is executing a Market Development strategy by expanding its core warehouse model into new geographic territories and deepening its presence in existing international regions.

The plan for fiscal year 2025 (FY2025) includes the execution of opening 26 net new warehouses, with 12 of those slated for international markets. This follows a strong prior year where Costco opened 29 net new locations in fiscal 2024, including 23 in the U.S., two each in China and Japan, and one each in Canada and Korea.

A key element of entering new national markets is the July 2025 opening of the second Swedish warehouse in Malmö, Sweden, located in the Stora Bernstorp area. This new location is planned to be 15,000 sqm or 17,000 sqm. The first Swedish warehouse opened in 2022.

Deepening penetration in high-growth regions like China is evidenced by the continued expansion; as of mid-2025, Costco operates at least 7 stores in mainland China, following the opening of the Shenzhen and Nanjing locations in early 2024. The company is also building an 8-story Chinese headquarters in 2025, signaling a long-term commitment despite a local membership renewal rate of 60% compared to the global average of 90%.

The expansion of the e-commerce platform is targeting existing international markets that are not yet served digitally. Costco operates e-commerce sites in the U.S., Canada, the U.K., Mexico, South Korea, Taiwan, Japan, and Australia. This leaves the following international markets, which have physical warehouses, without a dedicated e-commerce site for potential expansion:

The introduction of the core warehouse model to new U.S. states is marked by the entry into Maine in fiscal 2024, which brought Costco's presence to 47 states. The Maine location, which opened in November 2024, includes a Tire Center, Pharmacy, and a gas station.

These expansion efforts are underpinned by strong financial performance. For the first quarter of fiscal 2025 (twelve weeks ended November 24, 2024), Costco reported total revenue of $62,151 million, with net sales increasing 7.5% year-over-year to $60.99 billion. Net income for the quarter was $1,798 million, or $4.04 per diluted share. Membership fee revenue in Q1 FY2025 reached $1.166 billion, an 8% increase. As of the Q1 FY2025 report, Costco operated 897 warehouses globally, with plans to reach 914 by the end of FY2025.

• E-commerce comparable sales growth for Q1 FY2025 was 13.0%.
• The U.S. segment generated $45,088 million in revenue in Q1 FY2025.
• The Other International segment generated $8,659 million in revenue in Q1 FY2025.
• The company is projecting a total of 29 warehouse openings (including 3 relocations) for FY2025, resulting in 26 net new warehouses.

Costco Wholesale Corporation (COST) - Ansoff Matrix: Product Development

The Product Development strategy for Costco Wholesale Corporation focuses on deepening member value and expanding into higher-margin areas through its private label and fresh offerings.

Accelerate Kirkland Signature private label expansion, adding more than 30 new items per quarter.

The Kirkland Signature brand remains a cornerstone, contributing about one-third of Costco Wholesale Corporation's overall revenue. The pace of innovation is high, with the company introducing over 30 new Kirkland Signature items in the last quarter alone. This expansion is driven by identifying specific product gaps members are looking for.

Focus new product development on high-margin categories like health, beauty, and apparel.

This focus is evident in the digital space, where e-commerce sales surged 14.8% year-over-year in Q3 2025. Costco Wholesale Corporation's gross margin reached 11.25% in 2025, significantly outpacing the 8.5% industry average, which is supported by these higher-margin segments.

The key high-velocity, high-margin categories seeing growth include:

• Apparel
• Jewelry and luxury watches (with prices up to $5,000+)
• Health and beauty products
• Home goods and small electronics

Expand fresh food offerings, such as the new in-house sushi departments in more US locations.

Fresh food categories, including meat and bakery, are cited as key growth drivers for the fiscal year 2025. The in-house sushi program, proven successful in Asian markets and Hawaii, saw its first continental U.S. counter in Issaquah, Washington, prompting announcements to add sushi bars to two more locations following the initial test run.

Rework key private-label items, like the Kirkland Diapers, to increase member value by 11%.

Key private-label items are being actively reworked to enhance member benefit. For the Kirkland Signature Diapers, which switched to a new supplier, First Quality, in January 2025, the company reported an ability to increase the value by 11% following improvements. These physical improvements included a layer that is longer and thicker, a softer outer cover, and two times more stretch in the waistband.

The financial impact of value-driven private label strength is seen across the business:

Introduce new ancillary services, such as the food court's combo calzone, to drive foot traffic.

While specific data on a new combo calzone is not available, the food court strategy continues to use loss leaders to drive traffic. The Rotisserie Chicken, for example, is sold at an estimated annual loss of $30-$40 million to ensure members visit the warehouse. This strategy supports overall traffic, which saw August 2025 overall visits up 5.5% year-over-year, with same-store visits up 4.0%.

Ancillary service adjustments also manage traffic flow. Since June 30, 2025, an exclusive 9 a.m. shopping hour for Executive Members has shifted trips earlier, reducing traffic concentration during late-morning and afternoon peaks.

• August 2025 Overall Visits YoY Growth: 5.5%
• August 2025 Same-Store Visits YoY Growth: 4.0%
• Executive Member Early Access Start Date: June 30, 2025
• Rotisserie Chicken Estimated Annual Loss: $30-$40 million

Costco Wholesale Corporation (COST) - Ansoff Matrix: Diversification

You're looking at the hard numbers behind Costco Wholesale Corporation's push into new territory and new offerings. It's not just about opening more of the same; it's about testing the edges of the current model. Here's the quick math on where the diversification plays stand, based on the latest available figures.

Launch the Costco Business Center model into a new, established international market like Japan or Korea.

Costco Wholesale Corporation already has a footprint in these markets, which provides a base for the Business Center concept. As of the end of fiscal year 2024, Costco operated 19 warehouses in Korea and 35 in Japan. For context on expansion pace, fiscal 2024 saw the opening of one net new location in Korea and two in Japan. The strategy for deploying Business Centers often involves relocating an older club to a larger space, freeing up the original building for the smaller format, as CEO Ron Vachris noted.

Develop a new, premium digital subscription service for small business supplies in a new territory.

The digital channel is already significant, with digitally originated sales representing approximately 9% of total net sales in fiscal year 2024. The existing Costco NEXT marketplace already links over 86 supplier sites, offering an expanded array of items negotiated by Costco buyers. The total global membership base stood at nearly 137 million cardholders at the end of fiscal 2024. The renewal rate for these members globally was 90% in fiscal 2024.

Expand the Costco Travel service offerings to new international member bases (e.g., in Spain or France).

Costco Travel, a subsidiary, has an estimated annual revenue of $432.5M. The company has existing physical operations in the target countries: 5 warehouses in Spain and 2 in France as of the end of fiscal 2024. To enhance the digital offering for these members, Costco Travel announced a new alliance with Travelport in February 2025.

Acquire a small, regional logistics or last-mile delivery firm to vertically integrate e-commerce in a new market.

Vertical integration in logistics is already a focus area. In fiscal 2024, Costco Logistics delivered more than 4.5 million items, which was an increase of 29% from the prior year. This supported e-commerce sales, which grew by 16.1% year-over-year for the full fiscal year 2024. For the first quarter of fiscal 2025, e-commerce sales were up 13% year-over-year.

Pilot a new, smaller-format warehouse concept in dense urban areas outside the current footprint.

The average warehouse space is approximately 147,000 square feet. The Business Center model is the current vehicle for smaller formats, with CEO Ron Vachris noting that older, vacated warehouse spaces make good candidates for these centers. To enhance exclusivity in dense urban areas, select locations, such as Manhattan, began offering exclusive 9 a.m. shopping hours for Executive Members starting in June 2025.

The financial scale of the overall business provides the foundation for these tests:

These diversification efforts are supported by the existing membership structure and growth trajectory:

• Global Membership Base (FY 2024 End): Nearly 137 million cardholders.
• U.S. Membership Renewal Rate: 92.7%.
• Projected FY 2025 Net New Buildings: 24 (including 3 relocations).
• Projected International New Openings (FY 2025): 10 outside the U.S..