Costco 2014 Annual Report Download - page 12

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Ancillary businesses within or next to our warehouses provide expanded products and services and
encourage members to shop more frequently. The following table indicates the number of ancillary
businesses in operation at fiscal year-end:
2014 2013 2012
Food Courts ............................................................................................................
.
657
628
602
Photo Processing Centers ...................................................................................
.
649
622
591
Optical Dispensing Centers .................................................................................
.
641
614
589
Pharmacies ............................................................................................................
.
589
565
544
Hearing-Aid Centers .............................................................................................
.
549
502
469
Gas Stations ...........................................................................................................
.
445
414
394
Number of warehouses ........................................................................................
.
663
634
608
Our online business, which operates websites in the U.S., Canada, U.K., and Mexico, provides our
members additional products, many not found in our warehouses. These products vary by country and
include services such as photo processing, pharmacy, travel, business delivery, and membership
services. Net sales for our online business were approximately 3% of our consolidated net sales.
We have direct buying relationships with many producers of national brand-name merchandise. We do
not obtain a significant portion of merchandise from any one supplier. We have not experienced any
difficulty in obtaining sufficient quantities of merchandise, and believe that if one or more of our current
sources of supply became unavailable, we would be able to obtain alternative sources without substantial
disruption of our business. We also purchase private label merchandise, as long as quality and customer
demand are comparable and the value to our members is greater as compared to brand-name items.
Certain financial information for our segments and geographic areas is included in Note 11 to the
consolidated financial statements included in this Report.
Membership
Our format allows our members to utilize their memberships at any of our worldwide Costco warehouse
locations. We have two types of members: Gold Star (individual) and Business. Gold Star memberships
are available to individuals to purchase products for personal use. Business memberships are limited to
businesses, including individuals with a business license, retail sales license or other evidence of
business existence. Business members have the ability to add additional cardholders (add-ons) for an
annual fee. Add-ons are not available for Gold Star members. Our annual fee for these memberships is
$55 in our U.S. and Canadian operations and varies by country in our Other International operations. All
paid memberships include a free household card.
Our member renewal rate was approximately 91% in the U.S. and Canada, and approximately 87% on a
worldwide basis in 2014. The renewal rate is a trailing calculation that captures renewals during the
period seven to eighteen months prior to the reporting date. This method captures the annual
membership cycle as the majority of members renew within the six months following their renewal date.
Our membership was made up of the following (in thousands):
2014 2013 2012
Gold Star ..................................................................................................... 31,600 28,900
26,700
Business ..................................................................................................... 6,900 6,600
6,400
Business, add-on ....................................................................................... 3,500 3,500
3,800
Total
p
aid cardholders ......................................................................... 42,000 39,000
36,900
Additional cardholders .............................................................................. 34,400 32,200
30,100
Total cardholders ....................................................................................... 76,400 71,200
67,000
10