Costco Goes for the Wealthy

Costco’s basic idea was opening low cost warehouse stores, not located in higher cost shopping centers, and offering a no frills limited selection of goods that could be had in bulk at significantly lower prices.

My nearby Costco was an abandoned warehouse next to a Home Depot and across a boulevard from a Salvation Army facility that includes housing for some very poor people. Adjoining that property is apartment complexes for a struggling working class community.

There were people always sitting on the curb hoping to obtain day jobs. That is probably the consequence of the Home Depot. Some shoppers were uncomfortable with the environment and would not shop at that Costco.

Despite my description of that Costco it was a very busy place. Weekends were always packed with shoppers to the extent that a very large parking lot was near capacity and lines in the store checkout were long.

Just 2½ miles away Westfield (the Australian shopping center developer) owns the Westfield Topanga Mall that houses high end stores including a Neiman Marcus department store. That mall is on the perimeter of Warner Center and just 3 miles from Kim Kardashian and Jay z’s home in Hidden Hills and about 4½ miles from Calabasas which is the home of many entertainment and sports stars.

So Costco, understanding that wealthy people have more money to spend than the rest of us, closed their 20 year old warehouse and moved the 2½ miles into a new building that still has warehouse racking inside but offers the things that only the very wealthy can afford.

What could they offer that is not at your usual Costco?

Louis Vuitton and Chanel Handbags for $1500 (no picture).

$6500 bottles of Louis XIII Cognac.

$23,000 wedding ring.

A $19,000 Patek Phillipe watch.

A $150,000 5.34 carat Round solitaire pendant on what must be a diamond studded necklace. Click the picture to confirm that price.

There are no words that I can write to portray my astonishment.

Organic Food – It’s all about the Money

From the USDA National Agricultural Library

“Organic farming entails:
• Use of cover crops, green manures, animal manures and crop rotations to fertilize the soil, maximize biological activity and maintain long-term soil health.
• Use of biological control, crop rotations and other techniques to manage weeds, insects and diseases.
• An emphasis on biodiversity of the agricultural system and the surrounding environment.
• Using rotational grazing and mixed forage pastures for livestock operations and alternative health care for animal wellbeing.
• Reduction of external and off-farm inputs and elimination of synthetic pesticides and fertilizers and other materials, such as hormones and antibiotics.
• A focus on renewable resources, soil and water conservation, and management practices that restore, maintain and enhance ecological balance.”

I am sure you understood the meaning of this double talk. I am especially fascinated with the meaning of “Use of biological control, crop rotations and other techniques to manage weeds, insects and diseases.”

COSTCO has jumped on the band wagon of organic foods. On my last visit they handed me their special offer valid from Jan 13 to Feb 9. It was a catalog of 26 items. All items are marked USDA ORGANIC.

Huffington Post has this headline “Organic Food Is Not Healthier Than Conventional Produce: Study.” The report said “Stanford University doctors dug through reams of research to find out – and concluded there’s little evidence that going organic is much healthier, citing only a few differences involving pesticides and antibiotics.”

“Consumers can pay a lot more for some organic products but demand is rising: Organic foods accounted for $31.4 billion sales last year, according to a recent Obama administration report. That’s up from $3.6 billion in 1997.”

No wonder COSTCO has decided to offer organic foods. It’s the money!