Comparing Retail Giants: Costco vs. Walmart in the 2007 Fortune 500 Landscape
In 2007, Costco and Walmart represented contrasting retail strategies within the Fortune 500. With moderate advertising spending, Costco reported $60.2 billion in net sales and focused on quality with high employee benefits. In contrast, Walmart, the leading retailer with net sales of $344.9 billion, thrived on an extensive variety of low-priced products, often serving rural communities. This comparison highlights distinct business approaches; Costco emphasizes a treasure hunt shopping experience, while Walmart prioritizes affordability and large selection.
Comparing Retail Giants: Costco vs. Walmart in the 2007 Fortune 500 Landscape
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Presentation Transcript
Retail Marketing vs. Cory Smith Jennifer Yarrow Alex Brenner
Costco is #32 on the2007 Fortune 500 Costco stores and locations: 377 in the United States and Puerto Rico 71 in Canada 30 in Mexico (50-50 joint venture) 19 in the United Kingdom 5 in South Korea 6 in Japan 4 in Taiwan (One under construction) 2006 Net Sales: $60.2 Billion Wal-Mart is #1 on the 2007 Fortune 500 Wal-Mart stores and locations: Wal-Mart Stores Division U.S: ~3,900 Wal-Mart Discount Stores: 1,040 Wal-Mart Supercenter: 2,326 Wal-Mart Neighborhood Markets: 118 Sam’s Club (most comparable to Costco): 584 Wal-Mart International: 2,701 2006 Net Sales: $344.9 Billion Costco vs. Wal-Mart Facts
Advertising Budget Facts • “…Advertising Age estimated global measured advertising expenditure of $712m in 2005, making Wal-Mart the world's #42 advertiser.” • “…Costco is a $48 billion company that spends nothing on advertising and marketing.”
Retail Strategies - Costco • Costco • “… Costco is a retail treasure hunt…” • Upscale Clientele • As a result Costco employees enjoy higher wages and better benefits than other retailers. • Carry a limited number of products • 3,700 – 4,500 Products per warehouse • Achieve sales through volume • Costco average mark-up: 14% • “If Costco can negotiate a favorable price it will purchase a large quantity from that supplier”
Retail Strategies – Wal-Mart • Wal-Mart • “Wal-Mart stands for low prices…” • Serve those living paycheck to paycheck. (others invited as well) • Two-thirds of Wal-Mart stores are in rural areas • “80% of Wal-Mart’s square footage is in the 25% of zip codes with the greatest number of poor households” • Offer Variety • Wal-Mart typically carries 100,000 products, marked up ~25% on average. • Achieve sales through volume • Wal-Mart controls costs, allowing it to charge lower prices than its competitors and still maintain high profits.
Resources • http://www.walmartfacts.com/ • http://www.costco.com • http://www.walmartstores.com/ • NY Times Article • http://www.bosslady.ca/2006/09/tips_on_defining_your_target_m.html • http://en.wikipedia.org/wiki/Costco • http://en.wikipedia.org/wiki/Walmart
