In the books that I read, Costco tends to come up a lot. They’ve grown slowly and steadily for decades, and they’re a business that we should all try to draw lessons from.
Even in books about other companies, such as Joe Coulombe’s “Becoming Trader Joe“, Costco was there. In this case, it was in reference to a metric I had never really thought about before: SKUs per square foot. Put another way, it’s a measure of how many different products are in a given area.
From the book:
“No fixtures. The store would have most of its merchandise displayed in stacks with very little shelving. This implied a lower SKU count: a high-SKU store needs lots of shelves. The average supermarket carries one SKU per square foot. Trader Joe’s carried one SKU per five square feet! Price-Costco, one of my heroes, carried about one SKU per twenty square feet.”
Based on my experience, this seems to add up. Publix seemingly has a different SKU every few inches, whereas Costco will have huge pallets full of the same item. Costco’s method is much easier to manage and grow, but we certainly need Publix for their variety. Both are great, but I hadn’t ever thought about that unique measurement of SKUs per square foot.
