Expert: Costco caters to ultra-affluent

Aug. 30, 2012 at 5:14 PM   |   0 comments

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STEVENS, Pa., Aug. 30 (UPI) -- It's not surprising Mitt and Ann Romney enjoy shopping at Costco, because it is the only discount retailer that attracts the affluent, a U.S. expert says.

Pamela Danziger, president of Unity Marketing and luxury market expert, said Costco was the only discount chain that attracted more ultra-affluent -- consumers with more than $250,000 income a year -- than lower-income shoppers, with income ranging from $100,000 to $249,900 a year.

"The fact is the affluent customers that Costco attracts are about the only ones in this economy who can afford to invest in a six-month supply of paper towels or toilet paper," Danziger said in a statement. "Households on tight budgets can't afford to tie up so much cash in stockpiling supplies. In addition, Costco stocks many name brands and gourmet foods that appeal strongly to the wealthy."

Costco knows that its affluent consumers are likely to be small business owners acutely aware of the mark-up that typically comes at high-end stores. The discounter consciously strips away the frills that mean extra expense to these consumers and offers a bare-bones environment that says "savings," Danziger said.

"The affluent consumers get excited by the hunt for name-brand bargains," Danziger said. "They will put up with long checkout lines and the big-box format in order to get access to such a wide variety of quality items at deeply discounted prices and they are absolutely addicted to the Costco experience."

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