Costco’s Warehouse Strategy Extends Shopping Time, Driving Impulse Purchases for 145M Members

Costco shoppers wander vast warehouses like explorers in an endless maze, hunting for basics amid a sea of temptations. Across North America, frustration is evident on platforms like Reddit, where shoppers describe the lack of aisle signs and product labels as a deliberate barrier, turning quick trips into budget-busting ordeals.

Costco’s bare-bones signage is no mistake—it’s a calculated “treasure-hunt” model executives embrace. CEO Ron Vachris highlighted this during earnings calls, noting members often enter planning to spend $100 but exit with $300, thanks to warehouse layouts that guide shoppers past thousands of unplanned items. This approach exposes customers to the full range of goods, boosting exposure and sales.​

The Business Model Behind the Strategy

Membership fees form the core of Costco’s revenue, pulling in about $1.3 billion quarterly from 81.4 million paid household memberships worldwide. Product markups hover at a maximum of 14 percent for branded items and 15 percent for Kirkland Signature products, far below competitors’ 25 to 50 percent rates. To thrive, the company relies on high-volume visits and enlarged baskets, achieved through layout tactics that extend time spent inside.​​

Product Rotation as a Strategic Tool

Everyday essentials—toilet paper, milk, light bulbs, rotisserie chickens—shift positions constantly, acting as “triggers” that pull shoppers through multiple aisles. Costco deliberately limits its inventory to approximately 3,600 to 4,000 SKUs per warehouse, compared to 30,000+ at traditional retailers, with items rotating frequently to create a sense of discovery. Many products are available only seasonally or temporarily, prompting shoppers to return regularly. Even employees struggle to pinpoint items due to these frequent moves, with minimal advance notice before reorganizations. This forces extended wandering, where members encounter electronics, furniture, and premium displays along the way.​

The model taps into consumer behavior by fostering scarcity and surprise. Products rotate rapidly, with seasonal and limited-time items appearing briefly, sparking urgency. Entry pamphlets spotlight temporary deals on televisions, wines, or seasonal goods, amplifying fear of missing out. Neurological rewards mimic social media scrolling, releasing dopamine through “discoveries” that encourage repeat visits beyond mere necessity.​

Seasonal Timing and Renewal Power

Basics hide at the warehouse rear, making shoppers traverse high-traffic zones packed with seasonal rotations. Costco’s seasonal items typically hit shelves one to three months before the season begins—for example, summer items appear by May, winter gear by November, and Halloween candy by late August. This setup drives a 92 percent U.S. and Canada renewal rate, and 90 percent globally, as members bond with the hunt’s excitement over prices alone.​

Seasonal displays and rotating inventory foster discovery through scarcity and novelty. Competitors like Walmart and Target use clear signs, maps, and fixed placements to speed shopping and curb impulse purchases—practices Costco intentionally avoids.​

No Signage, No Maps

Warehouses feature almost no category labels, directional aids, or logic-based navigation. Complaints span parents with restless kids, shift workers, and professionals needing just a few items, yet all face drawn-out trips.​

Economic pressures in 2025 have sharpened the strategy’s appeal, drawing value-seekers to bargain hunts amid rotating inventory designed to create frequent returns. Seasonal shifts—holiday foods in winter, garden gear in spring—create a sense of fresh stock, prompting members to shop more often.​

The strategy remains central to Costco’s operations and long-term growth model. Leadership views the minimal-signage, rotating-inventory approach as an intentional operational strength that drives member engagement and spending.

For 145 million cardholders, the strategy generates extended shopping trips that convert browsing into purchasing, all while framing it as bargain discovery. As economic caution persists, this approach sustains loyalty, though persistent gripes signal potential risks if frustration erodes the perceived value of membership.​