Photos show what Costco looked like when it first opened in 1983 (2024)

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Jim Sinegal and Jeff Brotman first dreamed up the idea for Costco Wholesale in 1982. Brotman told CNN in 2009 that he didn't know Sinegal before pitching him on the idea of a European-style "hypermarket." Sinegal was a retail executive who'd previously worked under the businessman Sol Price at a warehouse club called FedMart. After Fed Mart, Price founded a new chain, aptly named Price Club, in 1976 in San Diego. Sinegal and Brotman told CNN that they planned to essentially "clone Price Club" when they launched Costco. The first warehouse bearing the Costco name kicked off its grand opening with a business show on September 15, 1983. Costco offered business owner memberships for a $25 annual fee, while "Group Gold" members could join for $30 a year. Sinegal told the Motley Fool that the chain's first 100,000-square-foot warehouse was a "pretty simple facility." A key piece of the business model's strategy was to keep costs low by sharply limiting the number of unique items, or SKUs, that are kept in stock. In 2009, he also told CNN that the "crowds weren't overwhelming" at first, but "business built up" gradually. Costco's low-priced, bulk-size offerings ended up catching on with shoppers. Less than a year after it was founded, Costco began to expand across the Pacific Northwest. The growth of Sam's Club – Walmart's answer to the influx of members-only warehouse clubs – also spurred Costco's expansion. "When Walmart announced it was going into the discount warehouse business, we had to compete and grow quickly," Brotman told CNN in 2009. Sinegal told the Los Angeles Times in 1985 that competition from Sam's Club and other Price Club copycats meant Costco needed to act fast. By the end of 1984, 200,000 Americans had become Costco members. That same year, The Associated Press dubbed both Price Club and Costco as "key players" in the wholesale-retail game. Sales at Costco rocketed from zero to $3 billion in less than six years — a first for any company in history, according to the company Just three years after opening its doors, Costco was a $1 billion company, Sinegal told CNN. When Sol Price was looking to retire, Price Club and Costco merged in 1993 to become the somewhat unwieldy PriceCostco. The resulting company boasted 206 locations and $16 billion in annual sales. Initially after the merger, there was a slight divide between "red" Costco warehouses and "blue" Price Club warehouses. In 1997, the company simplified its name to just Costco. FAQs

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Retail

Áine Cain and Dominick Reuter

Updated

Photos show what Costco looked like when it first opened in 1983 (1)

  • Costco opened its first locationin Seattle in 1983, building off Price Club's warehouse format.
  • Today's company is the product of a 1993 merger between Costco and Price Club, which opened in 1976.
  • Costco provided Business Insider with historical photos of the chain's inaugural warehouse.

Photos show what Costco looked like when it first opened in 1983 (2)

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Costco is a staple of the big-box-store landscape. Since its beginning in 1983, it has attracted a devoted flock of members thanks to its low prices and bulk sizes.

But the wholesale retailer's origin story is a bit complicated.

The Costco of today is in fact the result of a 1993 merger between Costco and its predecessor, Price Club, which was founded in 1976 by legendary entrepreneur Sol Price.

Costco provided Business Insider with a number of photos of the company's first warehouse from 1983.

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These images provide a glimpse into what making a Costco run would've looked like back when Ronald Reagan was in the White House.

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Jim Sinegal and Jeff Brotman first dreamed up the idea for Costco Wholesale in 1982.

Photos show what Costco looked like when it first opened in 1983 (5)

Brotman, who died in 2017, was an attorney who was inspired to open a European-style wholesaler after taking a trip to France.

Brotman told CNN in 2009 that he didn't know Sinegal before pitching him on the idea of a European-style "hypermarket."

Photos show what Costco looked like when it first opened in 1983 (6)

"I called around to retail contacts and asked them to list executives who could run such a business. Jim was on most lists. I cold-called him one day and flew to California to meet him," Brotman said.

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Sinegal was a retail executive who'd previously worked under the businessman Sol Price at a warehouse club called FedMart.

Photos show what Costco looked like when it first opened in 1983 (7)

Price was a titan in American retail, and a close mentor to Sinegal.

After Fed Mart, Price founded a new chain, aptly named Price Club, in 1976 in San Diego.

Photos show what Costco looked like when it first opened in 1983 (8)

Located in an old airplane hangar, Price Club exclusively offered memberships to small business owners.

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Sinegal and Brotman told CNN that they planned to essentially "clone Price Club" when they launched Costco.

Photos show what Costco looked like when it first opened in 1983 (9)

A key difference between the brands: Costco would appeal to non-business members as well.

The first warehouse bearing the Costco name kicked off its grand opening with a business show on September 15, 1983.

Photos show what Costco looked like when it first opened in 1983 (10)

Company sales in that first year reached $101 million, according to SEC filings.

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Costco offered business owner memberships for a $25 annual fee, while "Group Gold" members could join for $30 a year.

Photos show what Costco looked like when it first opened in 1983 (11)

Non-members could shop as long as they paid a 5% surcharge on their purchases.

Sinegal told the Motley Fool that the chain's first 100,000-square-foot warehouse was a "pretty simple facility."

Photos show what Costco looked like when it first opened in 1983 (12)

"We didn't have many of the enhancements that we've added to the business since then," he said. "It was clearly a warehouse; an open-beam ceiling and cement floors and industrial steel and forklifts moving around in the facility. As time has gone on, the model has incorporated a lot of new things that we've put into the business."

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A key piece of the business model's strategy was to keep costs low by sharply limiting the number of unique items, or SKUs, that are kept in stock.

Photos show what Costco looked like when it first opened in 1983 (13)

Even now, Costco warehouses only offer about 4,000 SKUs, as compared with about 30,000 at a conventional supermarket, or more than 100,000 at a Walmart store.

In 2009, he also told CNN that the "crowds weren't overwhelming" at first, but "business built up" gradually.

Photos show what Costco looked like when it first opened in 1983 (14)

Sinegal served as Costco's CEO from 1983 until his retirement in 2011.

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Costco's low-priced, bulk-size offerings ended up catching on with shoppers.

Photos show what Costco looked like when it first opened in 1983 (15)

"The original business plan called for eventual growth to about 12 Costcos, primarily in the Northwest, and maybe $80 million in sales per store," Sinegal told CNN in 2009.

Less than a year after it was founded, Costco began to expand across the Pacific Northwest.

Photos show what Costco looked like when it first opened in 1983 (16)

Costco's second and third locations werein Portland, Oregon, and Spokane, Washington.

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The growth of Sam's Club – Walmart's answer to the influx of members-only warehouse clubs – also spurred Costco's expansion.

Photos show what Costco looked like when it first opened in 1983 (17)

Founder Sam Walton specifically credited Price with inspiring some of his best ideas: "I guess I've stolen – I actually prefer the word 'borrowed' – as many ideas from Sol Price as from anybody else in the business," he said.

"When Walmart announced it was going into the discount warehouse business, we had to compete and grow quickly," Brotman told CNN in 2009.

Photos show what Costco looked like when it first opened in 1983 (18)

"That's why we expanded as fast as we did," Brotman said.

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Sinegal told the Los Angeles Times in 1985 that competition from Sam's Club and other Price Club copycats meant Costco needed to act fast.

Photos show what Costco looked like when it first opened in 1983 (19)

"We are working to get established in certain markets, to preempt those markets," he said. "That's why we expanded as fast as we did (12 stores in 18 months and six more scheduled this year), and that's the posture you'll see taken by most of the other companies."

By the end of 1984, 200,000 Americans had become Costco members.

Photos show what Costco looked like when it first opened in 1983 (20)

Membership fee revenue totaled $1.3 million in the first year, per SEC filings.

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That same year, The Associated Press dubbed both Price Club and Costco as "key players" in the wholesale-retail game.

Photos show what Costco looked like when it first opened in 1983 (21)

"It's one of the most exciting concepts to come along in many years that is truly different," said Ronald Loveless, the head of Sam's Club, told the news service at the time.

Sales at Costco rocketed from zero to $3 billion in less than six years — a first for any company in history, according to the company

Photos show what Costco looked like when it first opened in 1983 (22)

The company held its initial public offering in 1985, selling shares for $10.

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Just three years after opening its doors, Costco was a $1 billion company, Sinegal told CNN.

Photos show what Costco looked like when it first opened in 1983 (23)

At that point, the chain boasted "17 locations, 1.3 million members, and 3,740 employees," according to Costco's website.

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When Sol Price was looking to retire, Price Club and Costco merged in 1993 to become the somewhat unwieldy PriceCostco.

Photos show what Costco looked like when it first opened in 1983 (24)

Before the merger, the top three warehouse club chains were mostly regionalized, with Costco in the Northwest, Price Club in the Southwest, and Walmart-owned Sam's Club in the Midwest and Southeast.

The resulting company boasted 206 locations and $16 billion in annual sales.

Photos show what Costco looked like when it first opened in 1983 (25)

The first UK location opened that year, followed by the first Asian location in Seoul in 1995.

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Initially after the merger, there was a slight divide between "red" Costco warehouses and "blue" Price Club warehouses.

Photos show what Costco looked like when it first opened in 1983 (26)

"When I was a corporate auditor for the company, the first thing the folks at the warehouse would ask me is, 'Are you red or blue?'" a former employee told Business Insider.

In 1997, the company simplified its name to just Costco.

Photos show what Costco looked like when it first opened in 1983 (27)

At its 40th anniversary in 2023, Costco had 838 locations around the world, nearly 129 million membership cardholders, $237.7 billion in revenue.

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Photos show what Costco looked like when it first opened in 1983 (2024)

FAQs

What was the old name of Costco? ›

The company's first location, opened in 1976 under the Price Club name, was in a converted airplane hangar on Morena Boulevard in San Diego. Originally serving only small businesses, the company found it could achieve far greater buying clout by also serving a selected audience of non-business members.

Was Costco originally Price Club? ›

Price Club was an American warehouse club chain. Founded in 1976, it merged with its competitor, Costco Wholesale, in 1993. The original Price Club warehouse in San Diego, California, is now Costco location number 401.

What states do not have a Costco? ›

Hawaii and Alaska might be your first guesses as to which states are Costco-less, but the noncontiguous parts of the country actually have 13 warehouses between them. So, which states have the unfortunate honor of being completely void of the big box retailer? Wyoming, West Virginia, and Rhode Island.

What is the religion of the owner of Costco? ›

Sinegal: I was raised and educated as a Catholic. I would not suggest to you that I am a practicing Catholic today, although I still consider myself a Catholic. I am involved in many Catholic charities, mainly because I have that background. I am a trustee on the board of Seattle University, a Jesuit University.

Which came first, Sam's or Costco? ›

In 1982, the discount pioneer John Geisse founded The Wholesale Club of Indianapolis, which he sold to Sam's Club (a division of Walmart) in 1991. In 1983, James (Jim) Sinegal and Jeffrey H. Brotman opened the first Costco warehouse in Seattle.

How much did it cost to join Costco? ›

Costco membership is $60* a year. An Executive Membership is an additional $60* upgrade fee per year. Each includes a free Household Card. Please include sales tax in all applicable states.

Who owns Costco now? ›

Costco is a publicly traded company, meaning it is owned by its shareholders. There is no single owner.

Why is Costco brand called Kirkland? ›

Costco launched Kirkland Signature products in 1995 as an umbrella to its different private labels. The name came from the company's original Washington State headquarters. At the time there were about 30 different products, but now there are 364 products under the Kirkland brand.

Where is the smallest Costco in the United States? ›

It follows that the smallest Costco must be in one of the smaller U.S. states, right? It's actually in the biggest state by milage (though one of the smallest by population), but in a rather confounding area. The Juneau, Alaska Costco is just 76,696 square feet, a little over half the size of most stores.

Which state has the biggest Costco? ›

Salt Lake City, Utah, United States--In addition to being the biggest store at a whopping 235,000 square feet, the Salt Lake City Costco was also the first ever to serve as a hybrid location; with the additional space, Costco can offer 2,700 items including pallets of soft drinks and whole lambs and roasting pigs and ...

Is Costco Chinese or American? ›

Costco Wholesale Corporation, one of the largest retailers in the world, operates membership warehouses in which bulk quantities of merchandise are sold at discounted prices to club members who pay an annual membership fee. The company is based in Issaquah, Washington.

What company did Costco merge with? ›

In 1993 the Price Company (corporate parent of Price Club) and Costco merged to become PriceCostco. In 1997 the corporate name was changed to Costco Companies, Inc.

Was Cosco ever Costco? ›

Costco and Cosco are two different and unrelated companies.

Is Costco owned by Target? ›

Costco is not part of the Target Corporation (or vice versa) whereas Sam's Club is a division of Walmart Stores.

Why every Costco product is called Kirkland? ›

In 1995, Costco cofounder and former CEO Jim Sinegal, inspired by a Forbes article on branding, decided to create a single, unifying brand called Kirkland Signature, named for the Seattle suburb where Costco's original headquarters were located.

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