Costco Will Sell “Giant Bags Of Kale” To Compete With Amazon Prime

On its second-quarter earnings call, Costco’s chief financial officer said the company was exploring options to target younger customers for membership and ways to compete with Amazon Prime.

AP Photo/Elise Amendola, File

Costco knows that Amazon Prime is taking a portion of its customer base, and it has a plan for fighting back.

On a conference call to discuss its second-quarter 2014 earnings on Thursday, Richard Galanti, Costco’s chief financial officer, said the company was well aware of the threat Amazon Prime poses to Costco’s customer base, especially with its plans to launch a “pantry” feature specifically targeting big-box warehouse chains.

“There is overlap,” Galanti said in the Q&A portion of the call when asked about the threat of Amazon Prime to its consumer electronics business. This overlap, according to Galanti, appears to include a younger demographic than Costco is generally able to attract.

“Clearly, in areas like books and TVs, that’s changed the business,” Galanti said. “We’re looking at ways to get young people in here.”

So just what does Costco’s younger consumer crusade entail? Social media for one, and a new membership system that will launch in June or July, Galanti said.

Another youth-targeting tactic? Organic food products, including offering more organic beef and “giant bags of kale” to get younger consumers in the door.

“We’re not going to do anything brash,” Galanti said. “But we’re not going to have our head in the sand.”

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