Costco

Surviving 21st-Century Challenges With a bull run of over vi years straight of profit-earning increases, Costco experienced an unexpected decline in earnings in the first half of 2001. Much of this was beyond the confederacys control, as the West Coast of the U.S. suffered from an energy crisis that send energy prices skyrocketing. The state of California, where fully one-fourth of Costcos warehouses were located, experienced just about of the worst of the crisis, as rolling blackouts became a concern. Energy prices in California will certainly impact Costco more than another(prenominal) national retailer, David Schick, an analyst at Robinson-Humphrey, told the New York Times in June 2001, It costs more to operate in California, and they have an execrable lot of operations in California. The company responded to the crisis by equip California stores with backup generators to keep refrigeration units running in case of blackouts, turning down air-conditioning, and designing in the raw warehouses with as many skylights as building codes permit to allow the company to turn off lights during the day. Though the energy crisis was much to pick for the slide in gain, there were several other factors that contributed. The thriftiness was in a slowdown, decreasing overall retail sales.

convinced(p) the company was dramatically expanding, having already impoliteed 27 new warehouses that fiscal year (a 90 pct spending jump), legal transfer the total to 360 warehouses in the U.S., Canada, Mexico, the United Kingdom, Korea, Taiwan, and Japan. Also, the profits couldnt match the year-earlier profits that were driven much by Y2K-related buying. Despite the slowdown, Costco sales (in stores open at least a year) rose 5 percent in 2001, a crucial statistic in the industry. Revenue from social status fees (which had been increased the previous year) increased 23 percent, and Costco continued to represent an impressive 86 percent renewal rate in memberships, the highest in the industry. The company had about 16 million... If you want to get at a full essay, order it on our website: Ordercustompaper.com

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