If you’ve shopped at Costco, you’ve almost undoubtably noticed that Costco sells a lot of meat. I go to the Costco near my house often, and I like to stand at the end of the meat department counter and observe the customers purchasing meats. I’ve also rung the bell and asked questions to the staff in the meat department and have been impressed with their friendly and knowledgeable service.

I have no inside intel about how much meat Costco sells, but I believe there are several reasons that Costco sells truckloads of meat that I’ve observed:

1. Costco buys high quality meats. Many of the beef cuts are USDA prime. They offer organic ground beef and ground bison. The chicken is nearly all air-chilled instead of water-chilled. The meat presentation in the cases is always clean and neat.

2. Costco keeps their number of SKUs to a minimum and focuses on high volumes of key items that consumers like to buy repeatedly.

3. Costco has reasonable markups, normally about 14% over their cost. Compare this with other retailers that put 30 to 40% mark up on some meat items (not including what other retailers put on sale to get customers in the door).

4. Costco has an actual meat counter that you can see into. Walmart, Target and other national retailers have no in-store meat department that you can see, nor can you talk to anyone in the meat department at these stores about the meat they sell. Costco still processes some of their own meat in-store, plus they have their own USDA meat plant that processes their own brand.

5. Costco buys so much meat that they can get better pricing than many of their competitors.

Since I am in the meat business, I often get asked to sell just one piece of a ribeye or tenderloin or other beef sub-primal. But I have to explain that I only sell full cases of meats and I don’t break cases. I recommend to folks that they go to Costco, and they won’t be disappointed. They can buy just once piece of beef brisket or ribeye and they can get a better price than I could give them anyway. Costco buys better than I can.

I’ve been to the corporate office of Costco in Issaquah, Wash., and met with several of their meat buyers. They are very easy to talk with, but very loyal to their existing vendors and hard to break into unless you have a unique item or price advantage. Selling to Costco isn’t easy to start, but once you get in, if your items sell well, they are a great customer.

I’ve also been to Costco stores in Mexico and Japan many times. The footprints and layouts of the stores is the same as in the U.S. You must show your Costco ID to get in the door, then you walk past the items on sale that they want you to notice, then the big screen TVs, electronics, jewelry counter and then to the rest of the store. The meat department is always in the back of the stores, by design, to make you walk past everything else on the way in and on the way out.

I’ve seen videos from USMEF of the Costco’s in South Korea where people are filling their shopping carts to capacity with meats. South Korean Costco stores sell more meats than any other Costco stores in the world. I’ve heard that these stores may have to reset the meat case up to 8-10 times per day to keep the shelves full.

Costco will continue to expand their stores in the U.S. and abroad. They have an outstanding sales model and will continue to offer value and very high quality products that their loyal customers will buy over and over again.

Why else do you think Costco sells so much meat? What retailer in your region do you think does the best job selling meats?

Why does Costco sell so much meat?

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