How Costco Got Its Unforgettable Name

Costco has a pretty iconic name. It's short, catchy, and known in households across the world for offering bulk items and its Kirkland Signature brand foods for cheap. However, what many don't know is that the retailer was not always called Costco. Back in 1976, it had a different name: Price Club.

The first Price Club warehouse sold exclusively to small businesses, but quickly realized it would earn more selling bulk items to everyday consumers with a membership. It was named after founder Sol Price while also referencing the chain's low prices. Price Club was the first of its kind, but it was quickly followed up when Jim Sinegal and Jeff Brotman opened the first Costco location in 1983. The former had worked for Price in the past and likely saw promise in the idea of a wholesale warehouse. The two companies merged in 1993 and became PriceCostco, which was then shortened to Costco in 1997. Combining helped the two companies overtake Sam's Club, which had previously outnumbered both individual chains in sales.

Costco has never outright stated the meaning of its name, but many think it is a portmanteau of the words "cost" and "company." Regardless of the meaning, the change from Price Club to Costco was a good marketing decision, as it helped the company differentiate itself more clearly from its main competitor, Sam's Club.

Rather than simply making profit off the goods it sells, Costco makes money off its memberships, which come in two tiers: Gold Star ($65 annually) and Executive ($130 annually). Estimates on the number of memberships vary, but in 2024, Britannica placed it at 73.4 million households with 132 million members. Even if each household only had the basic membership (which is obviously not the case) this would mean Costco makes well over $4 billion a year from memberships.

With so much income from memberships, Costco can offer goods at a much lower rate than other grocery stores. For instance, when comparing the prices per unit, Costco beats Walmart (commonly known as a cheap grocery store) on the price of grocery store staples like eggs, crackers, pasta sauce, toilet paper, and more. This makes the "cost" in its name fitting, as the entire model is meant to reduce the cost of your items via the membership. You can even use a Costco membership across the globe, which can be helpful if you find yourself traveling and unsure of where to find good deals on food. While $65 a year can feel like a lot to cough up, considering how often most people buy groceries, the savings can really rack up, saving you hundreds of dollars over the course of a year.