Costco 2012 Annual Report Download - page 16

Recycling and Waste Stream Management Tons of trash that our warehouses generate each
week, much of which was once discarded into landfills, are now being recycled and renewed into
usable products, recycled into biofuels or compost, or used as feed stock. We also have a program in
our warehouses where meat scraps and rotisserie chicken grease are recycled by third parties to make
animal feed, biodiesel fuel, soaps, and other products. Our grease recovery systems, now in most of
our warehouses, recover millions of pounds of grease from the waste stream.
Energy Efficient Products and Innovative Packaging We have been an active member of the
EPA’s Energy Star and Climate Protection Partnerships for the past ten years and are also a major
retailer of Energy Star qualified compact florescent lamp (CFL) bulbs. We have sold nearly 250 million
energy-saving light bulbs during the past seven years. Additionally, the use of new technology in our
warehouse lighting systems, using LED (light-emitting diode) and HID (high-intensity discharge) lights,
as well as upgraded cooler/freezer refrigeration controls, have significantly reduced the energy needed
to operate our warehouses.
Our merchandise packaging is also becoming more sustainable. We pursue opportunities to eliminate
polyvinyl chloride (PVC) plastic in our packaging and replace it with recycled or recyclable materials.
Likewise, packaging design changes, as in the case of our Kirkland Signature cashew nuts, have
allowed us to increase the amount of product on a pallet (from 288 to 432 sell units in this example),
resulting in fewer delivery trucks on the road.
Commuting We continue to encourage our employees to carpool or vanpool – to reduce energy
consumption, as well as reduce emissions. The Commute Trip Reduction (CTR) program we began
eighteen years ago at our corporate office with eighteen vans has evolved into sixty-four vans (vans,
fuel, maintenance and insurance provided by five transit agencies); and we have begun vanpools in
some regional offices. We offer employees subsidies to vanpool, and we subsidize employees who
purchase monthly bus passes. In addition, we encourage employees to ride bicycles to work when
practical. All of these programs and activities help reduce our carbon footprint.
RISK FACTORS
The risks described below could materially and adversely affect our business, financial condition and
results of operations. These risks are not the only risks that we face. We could also be affected by
additional factors that apply to all companies operating in the U.S. and globally, as well as other risks
that are not presently known to us or that we currently consider to be immaterial. You should review
these Risk Factors carefully in conjunction with Management’s Discussion and Analysis of Financial
Condition and Results of Operations and our consolidated financial statements and related notes in
this Report.
We face strong competition from other retailers and warehouse club operators, which could
adversely affect our business, financial condition and results of operations.
The retail business is highly competitive. We compete for members, employees, sites, products and
services and in other important respects with a wide range of local, regional and national wholesalers
and retailers, both in the United States and in foreign countries, including other warehouse club
operators, supermarkets, supercenter stores, department and specialty stores, gasoline stations, and
internet-based retailers. Such retailers and warehouse club operators compete in a variety of ways,
including merchandise pricing, selection and availability, services, location, convenience, and store
hours. Our inability to respond effectively to competitive pressures, changes in the retail markets and
member expectations could result in lost market share and negatively affect our financial results. Some
competitors may have greater financial resources, better access to merchandise and greater market
penetration than we do.
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