Costco is known for a few different things:
- Massive discounts on bulk purchases
- A unique Kirkland Signature line of products
- An incredibly generous return policy
- A delicious food court with affordably priced meals
Costco is also known for its rotating assortment of inventory. Unlike other large retailers, which can easily fill their shelves with 30,000 or more SKUs (stock keeping units), Costco deliberately keeps its inventory to about 4,000 SKUs at a time. And the reason is simple.
Costco likes to limit its inventory so it can not only negotiate great prices with suppliers, but also keep an eye on quality control. Simply selling a product at a low price isn’t enough for Costco – not if members return it or complain about the value (or lack thereof) they received.
You may be wondering why Costco doesn’t expand its inventory to boost sales. But as the Financial Times says, Costco’s limited inventory strategy “builds economies of scale and enables the company to earn slim profit margins on high sales volumes.”
It’s a strategy that has worked for the company for a long time, so why mess with it?
Image source: Brooks Kraft LLC/Corbis via Getty Images
Costco’s approach to inventory can be a mixed bag for members
Because Costco only likes to carry so many products at a time, the company needs to be choosy in what it keeps in stock. But that can be a good thing and a bad thing for members.
Limited inventory means that your favorite seasonal item may not be on the shelves this year. It could also mean having to say goodbye to a product you buy regularly.
Related: Much-disliked Costco change brings members hidden benefit
In recent years, Costco has made a number of inventory changes that have not sat well with members. That includes getting rid of:
- Kirkland Signature chocolate chips
- Kirkland Signature soy milk
- Kirkland Signature giant muffins, which were replaced with a smaller version
Costco has also discontinued a number of popular food court items, including its:
- Churros
- Berry smoothie
- Roast beef sandwich
Sometimes, when one item disappears from Costco, an even better one comes in to take its place. But that doesn’t always happen.
At the food court, for example, the much-beloved churros were replaced by a giant chocolate chip cookie. But many fans would agree that this was not a winning move on Costco’s part.
Costco shares exciting update on holiday inventory
In the spirit of kicking things off early, Costco is already planning out its holiday inventory. And the company has warned that members may see a different product mix this year.
But in this case, “different” does not necessarily mean “bad.”
As Costco CEO Ron Vachris explained during the company’s most recent earnings call (September 25, 2025), the company’s buyers really had to take a close look at inventory this year, given a big shift in consumer spending habits as well as the looming threat of tariffs.
Related: Costco won’t offer key Sam’s Club perk for a devious reason
But that, said Vachris, provided an opportunity “to bring in categories that we don’t traditionally carry during that time of year.”
Some of the new items Costco is planning to feature in the coming months include:
- Backyard sheds
- Home saunas
- More furniture
By limiting certain holiday items, Costco can free up more space at its warehouse club stores to stock these and other large items the company is seeing demand for.
Costco’s online furniture assortment, for example, is considerably larger than the assortment carried in stores due to space constraints. But many consumers would rather check out furniture in person before making a purchase.
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By selecting its inventory more carefully, Costco can make these and other items available to members in stores. And that’s something Vachris is happy about.
“I still see it as a very exciting holiday season with some new goods that we haven’t carried in prior years,” he said.
Maurie Backman owns shares of Costco.
Related: Costco offers discount memberships (here’s who gets them)
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