Costco 2013 Annual Report Download - page 13

11
Our membership was made up of the following (in thousands):
2013 2012 2011
Gold Star . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,900 26,700 25,000
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,600 6,400 6,300
Business, add-on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500 3,800 4,000
Total paid cardholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,000 36,900 35,300
Additional cardholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,200 30,100 28,700
Total cardholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,200 67,000 64,000
All members are eligible for an Executive membership, with the exception of Business add-on members, in
the U.S., Canada, Mexico, and the United Kingdom, for an annual fee of approximately $110. Executive
members qualify for a 2% annual reward (which can be redeemed at Costco warehouses), up to a maximum
of approximately $750 per year, on qualified purchases. This program also offers (except in Mexico) additional
savings and benefits on various business and consumer services, such as check printing services, the Costco
auto purchase program, auto and home insurance, online investing and identity protection. The services are
generally provided by third-parties and vary by country and state. At the end of 2013, 2012, and 2011,
Executive members represented 38% of eligible cardholders. Executive members generally spend more
than other members, and the percentage of our net sales attributable to these members continues to increase.
Effective November 1, 2011, for new members, and January 1, 2012, for renewing members, we increased
our annual membership fee in the U.S. and Canada. Please refer to Management's Discussion and Analysis
in this Report for further explanation of the change and its impact.
Labor
Our employee count approximated:
2013 2012 2011
Full-time employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,000 96,000 92,000
Part-time employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,000 78,000 72,000
Total employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184,000 174,000 164,000
Approximately 13,800 hourly employees in certain of our locations in five states are represented by the
International Brotherhood of Teamsters. All remaining employees are non-union. We consider our employee
relations to be very good.
Competition
Our industry is highly competitive, based on factors such as price, merchandise quality and selection,
warehouse location and member service. We compete with over 800 warehouse club locations across the
U.S. and Canada (primarily Wal-Mart’s Sam’s Club and BJ’s Wholesale Club), and every major metropolitan
area has multiple club operations. In addition, we compete with a wide range of global, national and regional
wholesalers and retailers, including supermarkets, supercenter stores, department and specialty stores,
gasoline stations, and internet-based retailers. Competitors such as Wal-Mart, Target, Kohl’s and
Amazon.com are among our significant general merchandise retail competitors. We also compete with
operators selling a single category or narrow range of merchandise, such as Lowe’s, Home Depot, Office
Depot, PetSmart, Staples, Kroger, Trader Joe’s, Whole Foods, CVS, Walgreens and Best Buy. Our
international operations face similar competition.