Costco operates under a clear mandate.
The warehouse club charges its members an annual fee to join. In exchange for the fees, those members get access to the chain's warehouses, which are no-frills affairs in which the company makes every effort to keep prices down.
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Costco (COST) -) has never chased trends or been the first when it comes to any sort of major innovation. The company still has limited digital offerings because adding bells and whistles costs money.
This is a company focused on keeping its costs down so it can pass on the lowest possible prices to members. The chain's buyers work to ensure that if they place large orders, their suppliers will do even more to cut costs so the chain can deliver the cheapest shelf prices.
That's possible, however, only when items sell well. Costco can place huge orders because it offers a limited selection, so whatever takes up shelf space almost always sells very well. The chain does not stock every size of any item or much in the way of variety. It instead focuses on clear winners and offer them as cheaply as possible.
That could mean selling Coca-Cola (KO) -) products only in packs of 36 12-ounce cans because that's the most economical offering. Customers sacrifice selection,, but they get the best possible price per can.
It's a system that works and it's also one where items that stop selling get dropped by the chain PDQ.
There's a secret system that lets people know when that's happening. And Anheuser-Busch's (BUD) -) Bud Light might be working its way off Costco's shelves.
Image source: Shutterstock
Costco's 'Star of Death' Appears on Bud Light
If Costco takes Bud Light off its shelves, it's not making a political statement. Instead, the warehouse club will be deciding based on sales. And the chain appears to have made that decision due to a decline in interest in the brand.
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When Costco is discontinuing an item, it puts what's widely known as the "star of death," a small asterisk, at the top corner of the item's price tag. That's widely known to be a signal to store associates that the item will not be restocked once it sells out.
Various Costco members have taken to social media to say that they have seen the so-called star of death on various Bud Light SKUs at the warehouse club. Others have also reported very low prices on the beer brand.
"COSTCO says... STAR OF DEATH for Bud Light * it will not be restocked," @SharkInTheWater tweeted.
COSTCO says... STAR OF DEATH for Bud Light * it will not be restocked. 🍻 pic.twitter.com/hWYTXEckDA
— SHARKINTHEWATER (@s_h_a_r_k_e_y) July 11, 2023
"At Costco this morning, practically giving away Bud Light," @plinytheelder shared along with a picture of a Costco selling two 12-packs of the beer for $14.97.
Not every post was negative. Some took a more realistic approach to the brand's woes.
But Bud Light sales have dropped by more than 30% since the brand made the decision to hire the transgender social-media influencer Dylan Mulvaney for a marketing campaign.
That decision hurt, as did remarks by former Bud Light Vice President Alissa Heinerscheid, who called the brand's customers "fratty" and otherwise demeaned them.
Costco has not made any public comment on Bud Light and does not publicly discuss stocking decisions. So the question of whether the chain will fully remove Bud Light from its warehouse clubs remains open.
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