Costco Marketing Case Study: Membership as the Brand

Costco's marketing runs on its membership, not on advertising. Costco collected $5.9 billion in membership fees in fiscal 2026, about half of its $11.7 billion operating income, and its U.S. and Canada renewal rate was 92.3%. Chief Financial Officer Gary Millerchip said on the September 24, 2026 earnings call that Costco does not run paid digital advertising.

How does Costco's membership work as its main marketing?

Costco treats the membership as the first thing it sells, and Chief Executive Officer Ron Vachris called it the most important item Costco sells on the September 24, 2026 earnings call. Costco's fiscal 2026 results release shows membership fees of $5,907 million, up 11.0% from $5,323 million, against operating income of $11,685 million. That makes fees about 50.6% of operating income, a ratio calculated from the release.

The renewal rate is the number that shows whether the promise holds. Millerchip said the U.S. and Canada rate was 92.3% and the worldwide rate was 89.8% at the end of fiscal 2026, both up 10 basis points from the prior quarter.

How does Kirkland Signature support the membership promise?

Kirkland Signature is Costco's own brand, and Costco says it offers savings of at least 15% to 20% against the national brand equivalent with equal or better quality. Costco backs that claim with named price cuts, which gives members a before and after number they can check.

Costco received $184 million in tariff refunds in the fourth quarter and said it intends to reinvest the majority in lower prices for members. The price cuts it named on the call are below.

How does Costco earn attention without paid digital advertising?

Costco earns attention through member word of mouth, public price moves and moments such as the return of the food court churro. Millerchip said "we don't do any paid digital advertising" and that Costco still shows up in digital advertising through its reputation and what members say on social media.

The churro shows the pattern. Costco said speculation about it was filling social media feeds, then confirmed on the call that the food court churro would return to all U.S. locations starting in September 2026 for a limited time.

Costco also reports that traffic to its site from AI search grew triple digits for the second quarter in a row and converts at the highest rate of any traffic source. Millerchip said the Costco membership itself is among the top items that start from AI searches, and that teams are working with large language models to update product data so Costco's value shows clearly.

Who is the Costco shopper now?

Costco's member base is getting younger and more digital. Vachris said members under 40 have grown nearly 60% since COVID and now make up more than a quarter of the base, and Costco's digitally enabled sales passed $33 billion in fiscal 2026, up more than 20%.

Costco ended fiscal 2026 with 939 warehouses and net sales of $297.2 billion, up 10.1%, according to the results release. Vachris said Costco plans to open 33 warehouses in fiscal 2027, including five relocations, as it works toward 30 net new warehouses a year.

Costco recently widened third-party delivery by expanding Uber Eats from 17 states to the whole U.S. and adding DoorDash, next to its Instacart partnership. Vachris said those orders are mostly incremental to warehouse grocery shopping, and that members who use them skew younger.

What can a communications team copy from Costco?

A communications team can copy five practices from how Costco reports and markets its model, each tied to a number a reader can verify.

• Pick one renewal-style metric and report it every quarter, as Costco does with its 92.3% and 89.8% rates.
• Show price cuts as named items with old and new prices instead of a general promise of savings.
• Confirm a viral rumor on the record, as Costco did with the churro, so the confirmation becomes the story.
• Keep product data accurate and readable for AI search tools, since Costco reports that traffic converts well.
• Treat the paid product as the campaign, so the fee itself is part of the value story.

For other retail brands, see the retail and ecommerce communications pillar, nine big-box retail campaigns and Chewy's ownership of PetMD.

The through-line is that Costco's marketing is its renewal rate. Costco said the September 2024 fee increase no longer lifts the year-over-year comparison after the fourth quarter, so the next quarterly calls will show how much growth comes from members alone.