Costco Wholesale Corporation has revealed the significant scale of its real estate holdings, now valued at $31.9 billion, as the company continues its global expansion. During its recent fourth-quarter earnings announcement, the retailer detailed plans to open 35 new warehouses in 2026 while also celebrating the 40th anniversary of its iconic $1.50 hot dog and soda combination.
Key Takeaways
- Costco's real estate portfolio is currently valued at $31.9 billion, reflecting its strategy of owning most of its warehouse locations.
- The company plans to open 35 new warehouses in 2026, including five relocations, continuing its steady global growth.
- In 2025, Costco sold over 245 million of its famous $1.50 hot dog and soda combos, a key symbol of its value proposition.
- The company's private label, Kirkland Signature, celebrated its 30th anniversary and continues to be a major driver of sales and customer loyalty.
A Foundation Built on Real Estate Ownership
Costco's business model diverges from many major retailers through its emphasis on property ownership. Unlike competitors that often lease their store locations, Costco owns approximately 80% of its 914 warehouses worldwide. This strategy provides long-term stability and control over its physical assets.
This approach has resulted in a substantial real estate portfolio valued at nearly $32 billion. According to analysis from real estate professionals, each Costco site typically spans 15 to 20 acres, with an estimated conservative value of $25 million to $35 million per location.
Owning vs. Leasing in Retail
By owning its land and buildings, Costco avoids rent fluctuations and landlord negotiations that can affect other retailers. This control allows the company to invest in its properties for the long term and maintain a consistent cost structure, which helps keep prices low for its members. The company effectively acts as its own landlord.
The company continues to invest in property. Chief Financial Officer Gary Millerchip confirmed recent land purchases were made to support infrastructure growth, including facilities for expanded hot dog production and a new coffee roasting plant.
Aggressive Global Expansion Plans
Costco is maintaining a robust pace of expansion. The company opened 10 new warehouses in the fourth quarter and a total of 27 locations over the full year, which included three relocations. This brought its global footprint to 914 warehouses.
Looking ahead, the growth is set to accelerate. CEO Ron Vachris outlined the company's strategy for the coming year during an earnings call with analysts.
"We continue to see significant opportunities for expansion both domestically and internationally across the markets where we currently operate," Vachris stated, announcing a target of 35 new warehouses for 2026, five of which will be relocations of existing stores.
This continued expansion demonstrates Costco's confidence in its business model and its ability to attract new members in both established and emerging markets.
The Power of Iconic Value Items
A core part of Costco's appeal is its commitment to offering items at consistently low prices. The most famous example is the $1.50 hot dog and soda combo, which celebrated its 40th anniversary. This item has become a cultural symbol of the company's value-first philosophy.
Sales by the Numbers (2025)
- Hot Dog Combos: Over 245 million sold
- Rotisserie Chickens: Over 157 million sold
- Bath Tissue: Enough sold to circle the moon and back more than 200 times
The commitment to the hot dog's price is legendary. Costco's first CEO, Jim Sinegal, famously told his successor not to raise the price. To maintain the low cost, Costco took production in-house by opening its own hot dog manufacturing plant in 2009. The strategy has paid off, with combo sales growing by more than 23% in just over a year.
To mark the 40th anniversary, Costco has also reinstated Coca-Cola as its global soda partner for the food court combo, returning to the original pairing.
Kirkland Signature: A Brand Within a Brand
Alongside the hot dog's milestone, Costco's private label, Kirkland Signature, celebrated its 30th birthday. The brand is a critical component of the company's success, offering members significant savings compared to national brands.
According to the company, Kirkland Signature products provide an average saving of 15% to 20% over their branded counterparts. This provides a buffer against inflation and other economic pressures. In the last quarter alone, Costco introduced over 30 new Kirkland items, ranging from organic food to apparel.
CEO Ron Vachris emphasized the company's strategy for managing costs, such as tariffs. He explained that Costco takes a "very offensive approach" to mitigate such impacts.
"We’re going to be the last one to go up and always the first one to go down," Vachris said, referring to potential price increases passed on to consumers.
Financial Performance and Market Outlook
Costco's fourth-quarter earnings and revenue surpassed analyst expectations, driven by its focus on value. However, the market showed some concern over a slowdown in a key metric. The company reported a 6.4% increase in same-store sales, which marked the second consecutive quarter of deceleration in this area.
Following the earnings announcement, Costco's stock experienced a slight downturn, falling by approximately 1.8%. Despite this, the company's long-term strategy of property ownership, steady expansion, and unwavering commitment to low prices continues to define its position in the competitive retail landscape.
