Asif Suria

Shop at Costco, Invest in Safeway

Interesting thought Mark. Thank you for sharing with us.

I noticed your 2006 paper about Wal-Mart rolling out its organic initiative. Who would have imagined a few years ago that Wal-Mart would one day become the nations largest purchaser of organic milk and cotton.

What are your thoughts on Dean Foods, another company on my radar as a potential investment?

Shop at Costco, Invest in Safeway

@psonava You are absolutely right about Costco making most of their money on the membership fees. I am quoting from memory here and so don't hold me to the number but I believe they get more than 60% of their profits from membership fees given how low their margins are on the products they sell.

Big Bear almost makes a good point about rebates. I have an executive membership and get back almost as much money in rebates as I spend on the membership fee.

At any rate, I don't have to specifically calculate the membership effect because it is included in operating margins and Safeway's operating margins are better than Costco's even without membership fees.