Costco Apparel Growth | 40% Increase in Sales

ISSAQUAH, October 10, 2025 – Costco Wholesale Corp (COST.O) has grown its clothing business by nearly 40% over the past five years, significantly outperforming warehouse competitors BJ’s Wholesale Club and Sam’s Club ¹. The retailer’s apparel segment now generates approximately 9 billion annually, positioning it as a major force in the clothing retail landscape ⁸.

Costco clothing sales grew 40% in five years
Annual apparel revenue reaches 9 billion
Outperforms Old Navy, Neiman Marcus in sales

Market Position and Scale

Costco’s clothing business now surpasses traditional fashion retailers including Old Navy, Neiman Marcus, and Ralph Lauren in annual sales volume ². The warehouse giant’s apparel revenue has evolved from a supplementary category to a substantial profit driver, contributing meaningfully to the company’s overall financial performance.

The growth trajectory significantly exceeds that of direct competitors BJ’s Wholesale Club (BJ.N) and Sam’s Club, owned by Walmart Inc (WMT.N), highlighting Costco’s competitive advantage in the membership-based retail model ¹.

Strategic Approach and Pricing

Costco’s success stems from its high-volume, low-margin strategy featuring aggressive price points across clothing categories. The retailer offers jeans for 14, dress shirts for 25, and premium items around 100, creating compelling value propositions for budget-conscious consumers ⁸.

The company’s private-label Kirkland Signature brand plays a crucial role in the clothing strategy, contributing to both margin expansion and customer loyalty. Kirkland has evolved beyond a simple store brand into what industry observers describe as Costco’s “secret weapon” and a billion-dollar empire in its own right ³.

Operational Excellence

Costco’s clothing success reflects broader operational strengths including supply chain efficiency and inventory management. The company’s approach of carrying limited SKUs in large quantities allows for better supplier negotiations and cost control, translating into competitive retail prices.

The retailer’s membership model creates a captive customer base with higher average spending patterns compared to traditional retail formats. This membership revenue stream also supports the company’s ability to maintain lower margins on merchandise while preserving profitability.

Industry Impact and Outlook

The warehouse retailer’s emergence as a clothing powerhouse demonstrates the ongoing disruption in traditional retail channels. Costco’s success challenges conventional wisdom about where consumers prefer to purchase apparel, particularly as value consciousness remains elevated among shoppers.

Industry analysts view Costco’s clothing growth as sustainable given the company’s operational advantages and membership loyalty. The business model’s resilience during economic uncertainty provides additional confidence in the segment’s long-term prospects.

Not investment advice. For informational purposes only.