How A Single Costco Changes Its Local Economy

There are currently 914 Costco locations worldwide. They have opened warehouses in 14 countries and within North America, there's usually at least one store within every major metropolitan area, and each one of them has changed the economy directly surrounding it in some unintuitive ways. Their busiest location by far is probably not where you would expect it. It's actually down

here, just on the outskirts of Honolulu in Hawaii. Despite being only the 56th largest city in America having three other Costco locations within an hour's drive, there is a good reason why this particular location does so much business. And that will all start to make sense as you unpack Costco's unique approach to local economics.

While the company doesn't release any official data on individual stores, the best estimate that can be made from their public financials is that this location alone did almost half a billion dollars in sales within the last financial year. By revenue, this would make this one single store larger than most public companies. For comparison,

that's more money going through these registers than the global operations of Denny's and Smith & Wesson. Now, apart from being possibly the most American sentence I've ever spoken, it highlights how these retail hubs can become a massive influence on a local economy, easily on par with other major employers like factories or mines. But then the

question becomes, is that influence for the best? There's a well-studied phenomenon that occurs when a big box retailer like a Walmart opens within a local area. Because of their huge economies of scale and unassailable pricing power, they force out smaller local competitors. The rate of business closures materially increases on blocks surrounding a new Walmart location, and