Does Target Own Costco in 2024? Surprising Insights on These Retail Giants
With a combined revenue of over $200 billion, Target and Costco are two of the biggest retailers operating in the United States today. However, they each have distinct business models, shopper demographics, and ownership structures. This article will analyze if Target owns Costco and how these retail giants differ.
Key Facts on Target and Costco‘s Store Operations
Target operates 1,924 stores across all 50 states and generated $106 billion in 2021 revenue. Costco has 830 warehouses worldwide and reported $192 billion in revenue last year (see Table 1).
| Retailer | Number of Stores | Locations | 2021 Revenue |
|---|---|---|---|
| Target | 1,924 | All 50 U.S. states | $106 billion |
| Costco | 830 | U.S., Canada, Mexico, UK, Japan, Korea, Australia, Spain, France, China | $192 billion |
Table 1: Key statistics on Target and Costco‘s operations
Although Costco has significantly fewer stores, it tops Target in annual revenue. This is largely due to Costco‘s membership model, bulk inventory, and higher average transaction size. The average Costco member spends over $3,000 per year.
Ownership and Business Models: How Target and Costco Differ
Target and Costco have completely independent ownership despite being industry heavyweights (see Table 2).
| Company | Ownership | Year Founded | Store Model |
|---|---|---|---|
| Target | Publicly traded (NYSE: TGT) Largest shareholders: The Vanguard Group, BlackRock Fund Advisors, State Street Corp | 1902 | Big box retailer selling a wide variety of products including clothing, household items, electronics, groceries |
| Costco | Publicly traded (NASDAQ: COST) Largest shareholders: The Vanguard Group, BlackRock Fund Advisors, T. Rowe Price Associates | 1983 | Membership warehouse club selling bulk quantities of merchandise at deeply discounted prices |
Table 2: Ownership and business model differences between Target and Costco
A key divergence is that Costco operates as a membership warehouse club while Target is a traditional big box retailer open to all shoppers. Costco‘s locker-room style layout also contrasts with Target‘s more inviting in-store atmosphere.
However, both companies are publicly traded with similar top institutional investors. The Vanguard Group and BlackRock Fund Advisors are major shareholders of both Target and Costco.
Shopper Demographics: How Target and Costco Cater to Different Consumers
Target and Costco also appeal to quite different core demographics (see Table 3).
| Company | Typical Shopper Profile |
|---|---|
| Target |
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| Costco |
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Table 3: Typical shopper demographics for Target and Costco
Costco members are more affluent families who take advantage of bulk discounts. Target‘s shopper base consists primarily of middle-income mothers and millennials looking for trendy, affordable goods.
These differing shopper profiles contribute to widely divergent product assortments. Costco focuses on bulk essentials while Target prioritizes style, exclusivity, and its owned brands.
Private Label Brands: How Target and Costco Compare
Target Corporation owns over two dozen private label brands such as Cat & Jack, Goodfellow & Co., and Threshold that are exclusively sold at Target stores and on Target.com. These owned brands account for approximately one third of Target‘s overall sales.
Costco does sell its popular Kirkland Signature brand but does not develop or manufacture most Kirkland products itself. Costco has agreements with major companies like Starbucks, Huggies, and Duracell to sell rebranded versions of their items under the Kirkland name. Kirkland accounts for just 20% of Costco‘s revenue.
International Presence: Target‘s Focus on U.S. vs. Costco‘s Global Expansion
Costco has extensive international operations, with locations in 12 countries including China, Japan, Australia, Canada, Spain and France. Overseas warehouses account for 28% of Costco‘s sales.
In 2019, Costco entered China with openings in Shanghai, Beijing, Hangzhou, and Suzhou. Its warehouses abroad cater primarily to local members but also offer some region-specific products.
Meanwhile, Target does not currently operate any stores outside of the United States. In 2021, Target abandoned plans to open over 100 stores in Canada after failing to connect with Canadian shoppers.
Target‘s focus remains on improving its e-commerce channel, remodeling existing stores, and expanding its U.S. brick-and-mortar presence. International growth does not seem to be a priority for Target at this time.
The Bottom Line: Target and Costco Have Unique Models and Owners
In summary, Target does not own Costco. The two retailers have completely separate ownership structures despite being public companies with overlapping major shareholders.
While they are both retail giants, Target and Costco have distinct business models, brand portfolios, shopper demographics, and geographic footprints. Costco has wider global operations but Target tops it in U.S. store count.
Understanding the key differences between Target and Costco provides insights into the uniqueness of their strategics. Target caters to style-focused families looking for one-stop shopping. Costco provides no-frills bulk value to high-income households.
So no – Target does not own Costco. But they both own their niche as leading retailers with differentiated approaches to success.
