Costco has announced that it will continue opening warehouses in Spain despite accumulating 150 million euros in losses since its arrival in 2014, according to reports Digital Economy. The Spanish subsidiary recorded another 7.5 million losses in 2024, although its sales shot up to 607 million.
The company already operates five centers (Seville, Getafe, Las Rozas, Sestao and Zaragoza) and is looking for new land. Its latest establishment in Zaragoza started with 15,000 members on the day of its inauguration.
Why is it important. Costco represents the complete opposite of the model that dominates Spain:
- Mercadona triumphs with medium storesa reduced assortment and no membership. He doesn’t even have his own card.
- Costco is committed to large stores of more than 15,000 square meters, buying in bulk and charging a membership fee.
It is the clash between two philosophies: the Spanish one that lives in your neighborhood and offers small, domestic formats, versus the American one of “pay 36 euros a year and get 24 rolls of toilet paper.”
The strategy. Costco is playing the game Amazon played for two decades: lose money in a controlled way while it grows and build market share. Its 750,000 members (15% more than in 2023) and constant sales growth suggest that the model is finding its place.
- The company earned 11.5 million just from membership fees in 2024.
- Each new center comes with a gas station and Kirkland’s own brand products.
- Its average salary of 24,044 euros is above the sector.
The contrast. Where Mercadona has immediate success, Costco has sustained losses. Where Mercadona optimizes margins (3.88% net profitin an upward trend), Costco optimizes volume and loyalty. Where Mercadona dominates with a 28% national share, Costco is building small niches.
Yes, but. The bet has obvious risks.
- Costco needs critical mass for its model to work, and Spain is not the United States.
- Spanish purchasing habits favor proximity over volume, and competition in large stores – dominated by the French – is fierce.
- In fact, the hypermarket is going down in favor of the supermarket. We no longer make shopping a three-hour ritual on Saturday, but instead take advantage of empty spaces to make small purchases any day.
And now what. Costco maintains that 2025 will bring more investment and land prospecting. The key will be if it manages to replicate in Spain what it achieved in other markets: convert initial losses into long-term leadership. It took Amazon twenty years to become profitable. Costco has been in our country for ten years and continues to invest.
In Xataka | Spain has become a country addicted to something that a few years ago enjoyed little prestige: white label.
Featured image | Marcus Reubenstein
GIPHY App Key not set. Please check settings