At the time, many of my long suffering clients had been barely tolerant of my constant references to the inevitability of this new business model, the membership warehouse club, entering the UK and undermining the wholesale trade. Eventually in 1992, I rang Costco's home office in Seattle, explained my interest, and asked to speak to someone who might add some insight. I was transferred to CEO Jim Sinegal, who politely asked what I wanted to know....
Despite many years of working in the US, I am still astonished at their ease of access to key business people, especially in the retail trade.
Anyway, the call went well, and Jim said that if I was prepared to come to Seattle, he would give me some time. The following week I was shown into his office for what turned out to be 4.5 hours of the most down-to-earth and practical description of a business start-up I had ever experienced. He outlined his simple philosophy of demonstrable value for money, the need for tight cost-control, an obsession with the numbers, financial KPIs and performance at his finger tips, and how he had set up Costco on these principles. And all of this without a hint of arrogance, simply an obvious pride in achievement.
At lunchtime he offered to drive me to the nearest Costco branch and show me how it worked in practice... As we got into a new state-of-art Mercedes, he explained that his wife had given him the car as a birthday present that morning, and he was obliged to accumulate some appreciative mileage before getting home that evening....
At the Costco branch, Jim wandered around the aisles, exchanging first-name banter with staff and customers alike, quoted rates of sale and profitability of random SKUs and 'specials' and generally illustrated most aspects of his business model by example. I asked if I might take some pics, and was met with a polite refusal, one of their golden rules...
Throughout the session we exchanged views on the contrast with the European retail and wholesale trade, typical 'trading norms' and dynamics, key players and their philosophies and obvious gaps in the market.....
I was left with a firm conviction that Costco would make a big impact on the wholesale market in most countries.....
A week later a small parcel arrived special delivery, containing 50 x 35mm pics covering most aspects of a typical Costco branch which added much colour to my increasingly stark warnings to clients...
One year later, Costco opened in Thurrock....
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