Costco’s latest earnings reveal less about retail execution and far more about who still has the capacity to spend. At YourNewsClub, one number stands out as the real story: Executive Members now generate 74.3% of total sales, up again from the prior quarter. That concentration says more about today’s consumer economy than any promotion, price cut, or holiday surge.
Executive Members have become Costco’s economic backbone. They pay double the annual fee, receive 2% cash back, and shop with a frequency and basket size that far exceeds the average member. Their dominance has been building for decades. When the Executive tier launched in 1997, it was a niche upgrade. Through the 2000s, it accounted for well under half of sales. By the mid-2010s, it crossed the 60% threshold. Now, approaching three-quarters of total revenue, it defines Costco’s business model. A retailer once associated with the broad middle class increasingly depends on its wealthiest, most loyal, and most economically insulated customers.
That shift was visible across nearly every line item this quarter. Costco reported a record $250 million in online orders on Black Friday, close to 20% growth in comparable e-commerce sales, and holiday food volumes that bordered on surreal – 4.5 million pies sold in the three days before Thanksgiving and more than 350,000 pizzas served over Halloween weekend. These are not the behaviors of households under financial strain. They reflect high-volume discretionary spending by consumers with liquidity, storage capacity, and vehicles large enough to support bulk purchasing at scale.
Costco’s widely advertised price discipline operates on the same psychological layer. Discounted bacon, oversized walnut packs, and sub-$4-per-pound pies do not signal austerity. They validate spending. As YourNewsClub analyst Alex Reinhardt, on financial systems and household balance sheets, notes, this cohort is not cutting back – it is optimizing. The sense of making a “smart deal” reinforces spending rather than restraining it.
The wealth effect helps explain why this behavior persists. Rising asset values change consumption patterns even without profit-taking. When portfolios and home values climb, households feel more secure spending. Federal Reserve Chair Jerome Powell recently described this divergence directly: lower- and middle-income consumers are trading down and buying less, while higher-income households – buoyed by elevated asset values – now account for a disproportionate share of total consumption.
Costco’s Executive Members sit squarely within that upper tier. U.S. housing values remain dramatically higher than before the pandemic, rising nearly 60% since 2020 and adding roughly $20 trillion in homeowner equity. At YourNewsClub, the picture is reinforced by the fact that many of these households still hold mortgages locked in at 2–3%, while home prices appreciate at mid-single-digit rates and equity portfolios deliver double-digit returns. That spread creates large-scale consumer arbitrage: cheap leverage paired with expanding asset wealth.
Equity markets amplify the effect. Since 2020, both the S&P 500 and Nasdaq have risen by roughly 90%. Households with exposure through 401(k)s, IRAs, and brokerage accounts are not merely wealthier on paper – they feel wealthier. That perception translates directly into spending behavior, especially when compared with lower-income consumers whose balance sheets never benefited from the same asset inflation.
As YourNewsClub analyst Freddie Camacho, on the political economy of consumption, observes, Costco has become a mirror of a deeper structural divide. Aggregate consumption remains resilient not because households are uniformly healthy, but because a relatively narrow segment is carrying an outsized share of demand. Bulk retail thrives precisely where wealth concentration meets scale efficiency.
Costco’s performance is therefore not just a retail success story. It is a portrait of an economy increasingly driven by asset-rich households whose spending power remains insulated from inflation and volatility. And as Your News Club reads it, warehouse retail now thrives not because everyone is doing well, but because enough demand is concentrated among those who can keep buying in bulk – confidently, repeatedly, and at scale.