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5 Things about Kirkland Select
Feb. 6th, 2022 09:24 amYou've probably seen the Kirkland Select brand somewhere. It's on everything from winter jackets to batteries to boxes of freshly baked pizza. It's Costco's store brand. Yesterday I clicked into a CNN article about it, entitled "Why Every Costco Product is Called 'Kirkland Signature'" (5 Feb 2022). Though I think the title on my mobile news reader was something more clickbait-y than that. The article's actually a good read for people who are curious about Costco's history or enjoy reading light business case studies. Here are Five Things:
1) The Kirkland Select brand had $58 Billon of revenues last year. That made it America's biggest consumer packaged goods brand measured by sales— larger than 100+ year old mainstay brands such as Hershey, Campbell Soup, and Kellogg.
2) The name Kirkland Select comes from the city where Costco was originally headquartered, Kirkland, Washington. I knew that much, though what I didn't know is that they first considered Seattle Select. They couldn't get a trademark on it. And when the company moved headquarters to Issaquah shortly after they considered changing the name to Issaquah Select, but as the then-CEO put it, "Nobody could spell Issaquah, so we kept it."
3) Costco used to have multiple store brands that they unified as Kirkland Select in 1995. The move was driven by a growing trend in store brands, aka private label brands, overseas. Private label brands were not just cheaper than name brands but in many cases equal or high quality. ...Again, this was overseas. Costco saw this emerging trend before it was common in the US.
4) The emerging trend Costco saw aligns with my personal experience as a shopper. From the 1980s onward my parents bought a lot of store-brand groceries. They came from a reputable regional grocery chain, Giant Food, but they were clearly not up to brand name quality. We bought them because money was tight; the store brand was way cheaper and not crap, at least for some categories. By 1991 I had an apartment and was food shopping on my own regularly, and I found some private label brands at other grocery stores were actually comparable to brand names. That aligns with Costco starting to think about unifying its brands in 1991. And in 1993-94 I found that another regional grocery store, Harris Teeter, carried a private label brand President's Choice, that was sometimes better than the name brands while also being cheaper. That aligns with Costco's rebranding in 1995.
5) Not all big retailers have consolidated their brand names like Costco has. A classic example is Sears, which sold Craftsman tools, Diehard batteries, and Kenmore appliances. These were all quality brands. The drawback to keeping them under different names is that customers who have a great experience with one may not know to try trusting one of the others. The company loses potential sales— in addition to having to spend more money on marketing and supporting disparate brands. Even big retailers relevant today (Sears is only a sad shadow of its once powerful self) have this problem. Kroger has at least 5 store brands, Walmart has more than a dozen, Target has several dozen, and Amazon has over 400. Given how COST stock has been crushing it the past several years maybe competitors should pay attention.
1) The Kirkland Select brand had $58 Billon of revenues last year. That made it America's biggest consumer packaged goods brand measured by sales— larger than 100+ year old mainstay brands such as Hershey, Campbell Soup, and Kellogg.
2) The name Kirkland Select comes from the city where Costco was originally headquartered, Kirkland, Washington. I knew that much, though what I didn't know is that they first considered Seattle Select. They couldn't get a trademark on it. And when the company moved headquarters to Issaquah shortly after they considered changing the name to Issaquah Select, but as the then-CEO put it, "Nobody could spell Issaquah, so we kept it."
3) Costco used to have multiple store brands that they unified as Kirkland Select in 1995. The move was driven by a growing trend in store brands, aka private label brands, overseas. Private label brands were not just cheaper than name brands but in many cases equal or high quality. ...Again, this was overseas. Costco saw this emerging trend before it was common in the US.
4) The emerging trend Costco saw aligns with my personal experience as a shopper. From the 1980s onward my parents bought a lot of store-brand groceries. They came from a reputable regional grocery chain, Giant Food, but they were clearly not up to brand name quality. We bought them because money was tight; the store brand was way cheaper and not crap, at least for some categories. By 1991 I had an apartment and was food shopping on my own regularly, and I found some private label brands at other grocery stores were actually comparable to brand names. That aligns with Costco starting to think about unifying its brands in 1991. And in 1993-94 I found that another regional grocery store, Harris Teeter, carried a private label brand President's Choice, that was sometimes better than the name brands while also being cheaper. That aligns with Costco's rebranding in 1995.
5) Not all big retailers have consolidated their brand names like Costco has. A classic example is Sears, which sold Craftsman tools, Diehard batteries, and Kenmore appliances. These were all quality brands. The drawback to keeping them under different names is that customers who have a great experience with one may not know to try trusting one of the others. The company loses potential sales— in addition to having to spend more money on marketing and supporting disparate brands. Even big retailers relevant today (Sears is only a sad shadow of its once powerful self) have this problem. Kroger has at least 5 store brands, Walmart has more than a dozen, Target has several dozen, and Amazon has over 400. Given how COST stock has been crushing it the past several years maybe competitors should pay attention.
