Retailer of the Year
December 1, 2004
Costco Does Candy
Costco gives the candy category the same power retailing treatment that it accords virtually every other category with a strong assortment of everyday items nicely accented with its private label Kirkland Signature products and topped off with some attention-grabbing seasonal offerings. In the candy aisle, shoppers can stock up on 36- and 48-count packs of candy bars from major candy makers, toss a jar of 180 Strawberry Twist Twizzlers in the shopping cart, or perhaps scoop up an 80-ounce bag of Kirkland Signature Funhouse Treats. The latter includes count goods items that carry such familiar brand names as Smarties, Laffy Taffy and Tootsie Roll.
Costco’s co-branding strategy is also in evidence in the candy aisle. Jelly Belly is among a handful of other vendors (in categories ranging from coffee to poultry) to partner with the retailer and to offer a product that boasts both the vendor’s own brand name and the Kirkland Signature brand label on the same package.
Our store visit, made early in the Christmas shopping season, turned up enticing candy gift items such as a box of Belgian chocolates sold under the Kirkland label for $9.99 and an attractive gift basket featuring Ghirardelli and Godiva chocolates priced at $15.49.
"They are very good seasonal merchandisers, and I think a little better than some others in getting the merchandise out there earlier," observes ACNielsen’s Todd Hale.
Fast Facts About Costco
Headquarters: Issaquah, Wash.
FY 2004 Sales: $47.15 billion
Warehouse Buildings: 442
Reach: 36 states and 7 countries
Employees: 106,000 plus
What’s Ahead: Plans are in place to experiment with some different prototypes—some smaller and some larger, starting next year.
Costco Candy Aisle Conversations
Confectioner’s Renee Covino took a stroll through Costcos located in Austin, Texas, Denver, and Albuquerque, N.M., to find out what customers had to say about the sweetest aisles in the building.
You can’t beat the prices, says Kay, a working mother of two. "I let my kids pick out one box of candy bars, and they know it’s supposed to last them the whole month. They spend a long time in the aisle choosing something different every month. Meanwhile, I buy sugarless gum and Altoids for my husband and me in the case packs. Even on sale, you can’t find it cheaper anywhere.”
Any candy under the Kirkland label (Costco’s own brand) is awesome, maintains Lindy, a retired lawyer.
"I actually don’t eat a lot of candy, but I buy the Kirkland chocolate-covered raisins and chocolate-covered almond clusters in these large tubs to bring to my friends and former colleagues’ offices. You can get fancier packaging in other candy here, but the quality of Kirkland is so good, I’ve come to trust that without having to think.”
I teach my kids the value of a dollar with the Twizzlers in a tub I buy here, admitted one dad. "My kids love those Strawberry Twizzlers, so I play like a store and charge them 25 cents apiece, which they pay me out of their allowance or chore money. I end up making money on the deal, of course, because the prices are so good here, so when the candy is gone, we use that money as a family to go on an outing of the kids’ choice.”
We wait for the holiday seasonal candy at Costco, reveals a middle-aged couple. They explain how they buy only one special brand for all their holiday candy gifts—Fererro Rocher—and they know the warehouse club will get it in every year. "The thing is, you can get it here for $8.99 for 48 pieces," says the husband.
I started selling candy I buy here at the counter of my hair salon business, says Mandy. She explains how she started giving out Halloween candy for the kids (purchased at Costco). "Then the light bulb went off a month later, that I could actually make a little extra profit this way," she says. "I still give out little Tootsie Rolls and such, but I sell larger candy items right up front—something different every other week.”
This is the best way to buy Christmas gift candy, said one businessman, pointing to an endcap of See’s Gift Certificates, which Costco had packed in a clear clamshell—two one-pound chocolate gift certificates at See’s Candies for $19.49 (retail value $26.40). "I give these to some of my employees, and they’re great. I don’t have to think about which chocolate to get. And I save money in the process. Costco is always coming up with new ways to make my holiday shopping easier."
I shop here and at Sam’s for holiday party treats like candy and cookies, maintains Marie, a stay-at-home mom. "Costco is like the Target of warehouse clubs to me. I shop at both Target and Wal-Mart, too. Costco, like Target, seems to have taken a higher approach—with more upscale items, even in candy."