Costco’s Kirkland is still trying to get into this category, CEO says

Food, paper products, eyewear, cleaning supplies, clothing, tires, pet products, health and beauty goods, coffee, gasoline, and even high-quality wine — there is almost no section in your local Costco that is without a Kirkland Signature alternative. 

There is, however, one category that Kirkland Signature hasn’t been able to crack into, despite Costco’s CEO hoping it would. 

What is Kirkland Signature?

Costco introduced the Kirkland Signature label in 1995, naming the brand after its original headquarters in Kirkland, Washington, about 20 minutes outside the heart of Seattle.

In the 20 years since, Costco has expanded the label to include hundreds of items throughout its warehouses. Before the Kirkland Signature label is placed on any product, however, the item must undergo a rigorous process and receive approval directly from the CEO.

Since early last year, that final signature has come from Ron Vachris, a long-time Costco employee who became CEO after serving as COO since February 2022 (the same time he was named company president).

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Items sold under the Kirkland Signature label are intended to be of high quality but lower cost, Vachris recently explained in an interview with Sarah Nassauer, a retail reporter for The Wall Street Journal.

It starts with buyers for Costco. They may notice that prices for a product are rising while the price of the raw goods used to create the product is not. That could potentially open the door for a Kirkland Signature item that can be sold for cheaper while still aligning with Costco’s quality expectations. 

Eventually, the idea will “work its way up the list” to the CEO’s desk. But not every item gets the green light right away: Vachris told the WSJ that he asked for a bacon, egg, and cheese breakfast sandwich to “exceed the national brand on the bacon involved.” Ultimately, a way to incorporate more protein while maintaining the price was found, and the sandwich was approved.

It has since been successful, Vachris said.

Where Kirkland hasn’t yet seen success

There are, however, products without a Kirkland version at Costco. It’s not that the company hasn’t tried, though.

Vachris pointed to consumer electronics. He said this is one area “we’ve always looked at and said, ‘I would love to get into that.’”

“We have yet been successful in trying to find something in that category that we’ve really been able to stay with and continue to grow,” he said.

Costco’s closest step into the electronics world has been somewhat of a small one, at least in the physical sense: Customers can count on finding 48-count packs of AA and AAA batteries at their nearest warehouse.

Few other retailers have found a path into consumer electronics.

Target has its Heyday label, which offers tech accessories (like phone cases and chargers) in addition to Bluetooth headphones and speakers. Walmart has a similar offering, known as onn., that features televisions, streaming devices, and even tablets.

Costco may still find a way to break into the category, Vachris noted.

Meanwhile, other new additions to the Kirkland Signature family could be on the horizon. Late last year, Vachris told investors he wants to continue pursuing investment opportunities for the private label where they can. Items added to the line recently include a laundry oxi powder, food storage bags, socks and flour, according to a report.

For now, Kirkland Signature products make up about one-third of Costco’s sales, but Vachris told the WSJ he believes it’ll go even higher.

“It’s not gonna be a sprint, it’s gonna be a marathon.”