‘The Joy of Costco’
In the JCC U’s opening session, authors serve up a look at their favorite store
Many of us are seduced by the lure of shopping. The siren song can come from just about anywhere.
It can be the fascination of an everything-jumbled-together-and-who-knows-what-you’ll-find antique store; or the glamour of a star, high-end clothing store in, say, the Lower East Side, where the two or three garments are spotlit and whatever it is — often you can’t tell — you know you can’t afford it; or the cookware store that has so many objects that it almost makes you wish that you could cook; or, and maybe best, niche bookstores with racks full of old British mysteries. It could even be browsing online, in places you’d never be able to get to in real life.
For David and Susan Schwartz, the irresistible pull came from Costco.
The little one in East Harlem.
The couple, who live on Manhattan’s Upper West Side and will speak at the Kaplen JCC on the Palisades in Tenafly on September 26 (see below), have written “The Joy of Costco,” a generously shaped, highly colored book that opens with a history of the business — it started, more of less, with Jews! — and then becomes an encyclopedia about the industry giant, with entries including not only Bakery (lots of baked goods are manufactured in Costco warehouses, Books (sales at Costco are very useful to the industry, to understate), Caskets and Coffins (Costco’s got ’em), Eggs (mostly cage-free), and Iceland (75% of Icelanders are members), but also Kosher (many Kirkland Signature and other brands have hechshers).
“Yes, it is a love letter to Costco,” Ms. Schwartz said.
Mr. and Ms. Schwartz — let’s call them David and Susan here — find Costco’s history and its approach not only impressive but moral.
The basic idea behind Costco — that a low annual fee gets you into any store around the world in the nearly 900-store network, and that in return for the fee merchandise is carefully curated, and prices are kept genuinely low — came from the Bronx-born, San Diego-bred Sol Price, the son of Jewish immigrant parents from Russia, who was born around the turn of the last century and started the Price Club in the mid-1950s. “He was raised in a relatively secular Jewish household, but he felt his Jewish ethnicity and a Jewish connection very strongly,” David said. “He was a very quiet donor to Jewish causes — and that quiet giving is a typically Jewish approach to charity.
“He was a lawyer, and he had a sense of what he called the fiduciary responsibility not to mistreat your client.” That sensibility suffuses Costco, the Schwartzes said.
“He started as a lawyer in San Diego when it was a relatively segregated community. The Jews had their own services, and so did the goyim. Sol’s clients were mainly small Jewish merchants. And then, in 1953, his wife inherited a warehouse in downtown San Diego from her father. They didn’t know what to do with it.” It was hard to sell.
“And then one of Sol’s clients, who was a jeweler, said that he was trying to expand, and asked if he could use the warehouse to sell jewelry.”
So, although Costco’s stores being warehouses seems an integral part of its model, it grew out of expedience. Mr. Price was saddled with a warehouse that he couldn’t sell. A client needed rental space. The idea took off from there, but it was rooted in those specifics.
Then there’s the high quality of merchandise that Costco demands, both Schwartzes said.
“What you get there is high quality,” Susan said. “The maximum markup is 14 percent. And you can get things there that you cannot get in other places, because of its buying power.” It’s not the membership model that makes it unique, it’s what its owners do with that model.
At the beginning, even before Costco, when it still was the Price Club, “Sol wanted low prices, and he wanted his members to trust that they were getting the best price possible,” David said. “For example, one time he couldn’t sell sugar as cheaply as local supermarkets could, so instead of stocking sugar he put up a sign telling people to buy it at the supermarket because he couldn’t meet the price.”
“It goes back to the idea of tikkun olam,” of repairing the world so that it becomes a little better than it had been,” Susan said. “And even now, Costco does a lot of charitable giving that they don’t talk about.”
The stores also do not advertise. The owners do not believe in paying for it — that would demand higher margins — and they do not believe it to be necessary. They have huge numbers of members as it is. As of February 2023, the Schwartzes tell us in the book, the system had 123 million cardholders, and that, they estimate, means more than 68 million households.
Costco pays its employees well and treats them well, David said. “It’s a longstanding Jewish value,” he added. And Costco management says that “treating employees well is not altruism. It is good business. The turnover of employees after the first year of employment is less than 10 percent. That’s low, he stressed.
“During covid, other businesses laid people off. Costco didn’t. When some people were able to get to work, they were paid time and a half. Anyone who was over 65 or had any kind of underlying condition was paid a full-time salary and asked to stay home.” David reported that the CEO shrugged and asked, “What else should I have done? I’d just have to rehire them back anyway…”
The Schwartzes rhapsodize on Costco’s offerings.
“Any member can get a free hearing test there,” Susan said. “I have hearing aids from Costco. They cost $1,500. They would have been from $7,500 to $10,000. My mother-in-law went to a private audiologist. The test was $350. They were going to charge $10,000 for the hearing aid.
“Costco carries the same brands.”
They also raved about the food court. “There’s a limited menu, but you can get a hot dog and a can of soda for $1.50.” That price hasn’t changed since 1985 — although in order to keep the price down, the hot dog now is treif. It used to be kosher. “Whenever they have a choice, whenever they can make something kosher, they do,” David said.
“It’s a decent company,” he added. “They do the right thing when no one is looking.”
There are 21 Costcos in New Jersey and 19 in New York; between them, that’s 7 percent of all the stores. There are Costco warehouses in 13 countries.
For their book, the Schwartzes visited many of them. “We called it our Costco World Tour,” Susan said, logically.
Each Costco carries merchandise appropriate for its demographics — it’s got lots of foods for the large Indian community in Edison, for example, and “in the food court in South Korea, they sell fresh watermelon juice,” David said. “It’s delicious,” Susan added.
Another Costco has golf carts. “If you happen to walk in and realize you need one, it’s right there.
“The one in Brooklyn is like a United Nations,” Susan said. “You can get an entire halal frozen goat, you can get kosher food, and you can get South Asian food. And also there’s Kirkland Signature smoked salmon and bagels.”
There’s not a Costco in Israel yet, “but the government has asked for one,” she continued. “It takes a long time to figure out how to enter a new country. They have to find a location — which can be difficult — and they have to figure out how to get the goods there.” And of course the war in Gaza has put many plans, including this one, on hold.”
The Schwartzes’ 280,000-mile world tour took them only to places that have a Costco — with one exception. From Shanghai, they detoured to the Great Wall of China. “We had a justification,” Susan said. “Whenever a Costco opened, the owners go there. When the founders traveled together, in 35 years they never traveled anywhere, except when they went to the Great Wall together.”
The Schwartzes went to one opening, in a Swedish industrial complex outside Stockholm, in October 2022. (Fun fact — Costcos open on Thursdays, the Schwartzes said. They don’t know why, they added.)
“The warehouses are never smack in the middle of a city,” Susan said. “It’s in an area in or near the city that you wouldn’t have gone to otherwise. And if you go back in 10 years, you’ll see that it will be valuable property, because Costco pioneered it.”
As an aside, Susan — whose career, launched by an MBA from Columbia, was in marketing, as a freelance commercial maker, and then, with David, in an industrial search firm — gives some biographical details about her husband. David, who has a Ph.D. from MIT, has had a wide-ranging career; he’s the author of many other books, including, most recently, a biography of the physicist Enrico Fermi. She’s from Philadelphia, he’s from San Francisco, where his parents were early Price Club members, and — this is the surprising bit, that’s not on the book jacket — his father, Dr. Melvin Schwartz, won a Nobel Prize in 1988.
According to Wikipedia, Dr. Schwartz “shared the 1988 Nobel Prize in Physics with Leon M. Lederman and Jack Steinberger for their development of the neutrino beam method and their demonstration of the doublet structure of the leptons through the discovery of the muon neutrino.”
David had gone with his family when his father was awarded the honor, so this was his second time in Sweden, his wife said.
“It was interesting, because Swedes love American things, but they are also by nature a little skeptical about things. The store was incredibly crowded, but I talked to people who told me that the first day’s take wasn’t as high as it normally would be on opening day.
“The sense was that people were looking at the prices, but they weren’t sure how good they were,” she said. “They had to check them out.” The next day, many of them came back, this time to buy things.
The store in Sweden had “rhinestone-encrusted Gucci sunglasses. You could imagine skeptical Swedes wondering who might possibly need that.” On the other hand, there was a run on the stock of very well-priced air fryers. “And there were suitcases. Swedes love to travel, and the price was good.”
They saw a “4 1/2-foot-long chocolate bar.” They were tempted but didn’t buy it — it would be too big to get home easily, and far too big for their small New York City apartment, David said.
You can tell what season it is from inside the window-less warehouse, they added. “We just saw the first pumpkin pie of the season, and the pie is the size of both of our heads combined,” Susan said. “It costs $5.99, and it’s sold only four months a year.”
They will talk about this and other delights at the Kaplen JCC, for the JCC U.
Who: Susan and David Schwartz
What: Will talk about their new book, “The Joy of Costco”
Where: At the Kaplen JCC on the Palisades in Tenafly
When: On Thursday, September 26, at 12:45
Why: As part of the JCC U’s longer program, which begins at 10:30 with coffee and conversation, kicks into gear at 10:45 with the morning presentation, includes a lunch break — food is not included — at noon — and then goes to this talk.
How much: $38 for JCC members, $45 for nonmembers for the full program, and $100 for members, $120 for nonmembers for the full three Thursdays fall session.
ALSO, the morning presentation is
Who: Professor Jason Schulman
What: In a talk called “Can You Actually Say That? Free Speech and the Presidential Election,” he will look into free speech in America in general, and in specific how it relates to the ongoing presidential campaign. “We hear political speech on cable news, newspapers, social media, podcasts, and even viral memes,” the JCC’s website says. “We’ll unravel how these diverse channels challenge the concept of free speech during election season.”
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