Value of the Costco Kirkland Signature Brand

01/17/2019

CNN Business reported on the annual sales value of the Kirkland Signature brand. 

Sales attained $40 billion in 2018, an 11 percent increase from 2017. The Kirkland brand was introduced in 1995 and was named for the location of Costco corporate headquarters. To place the value of the brand in perspective, Kirkland sales are larger than those of Campbell Soup, Kellogg and Hershey combined.

Kirkland brands usually sell for 20 percent less than comparable national brands. The introduction of a new Kirkland product on a Costco shelf invariably results in a price reduction for the competing nationally branded item. This was emphasized by CFO of Costco, Richard Galanti, stating “When a traditional brand is losing shelf space or market share, what do they do? They create better value.”

Karen Short, retail analyst at Barclays quoted in the CNN article stated “Kirkland is a brand in its own right.” She added “It is one of the reasons people go to Costco, and that’s not necessarily something you can say about many private labels.”

Critics of the strategy of private branding have pointed to the problems and negative publicity which can arise in the event of a quality problem or a foodborne infection or a negative press report relating to a supplier. The implication is that Costco will progressively be more concerned over compliance with specifications especially for food products including eggs.






























































































































































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