Costco is one of the most successful retailers around the world and because of the benefits, a lot of people love to use their credit cards there. According to the Statista Portal, by 2014, the company was reported to have 663 stores around the world which is a huge number considering that people have to buy a membership to be able to shop there.
The success of the franchise cannot be denied. In 2010, the company had 540 stores which means that 123 warehouses opened in only four years. Moreover, each of these facilities report average $146 million in sales and more than 80 million of its customers use credit cards. No wonder even a giant like American Express is taking a huge blow losing this exclusive partnership.
With the new credit card which also works as the membership card, the retailer’s customers can expect increased benefits such as 4% cash return on gasoline purchases and 3% from dining. However, those returns have to be redeemed in Costco stores. Also, the advantages vary from regular memberships to premium ones, so it is important for Costco’s customer to check the info with their providers.
It is too early to say the king is out of the game
According to some experts, Amex has a hard time keeping its clients spending, which is why other companies such as Visa and MasterCard are now using more aggressive tactics to grab a hold of the massive customer database American Express can boast off. To do so, these companies are offering more benefits to the clients which consequently increases the number of clients wanting to go to a particular store. According to Fortune, Amex’s client database is currently weak, and its competitors are taking the initiative.
Visa now accepted at Costco! Costco Anywhere Visa Card by Citi launches in US & Puerto Rico. https://t.co/gMqBofSkOP pic.twitter.com/kP0SPRNpyi
— VisaNews (@VisaNews) June 20, 2016
It is a fact that both Visa and MasterCard reported more winnings and an outstanding increased value of their actions while American Express’ numbers lowered. However, the latter has a solid lead over its competitors. The company reported $34.4 billion revenue in 2015 which represented 4.3% less than the previous year, but the number almost triples its closer competitor. Visa reported $13.9 billion income the same year while MasterCard’s earnings upped to $9.7 billion.
How American Express is getting killed by MasterCard and Visa—in one chart https://t.co/ybyBSOVosZ
— Fortune (@FortuneMagazine) June 20, 2016
Some people are putting Amex in the same group that Apple and Goldman Sachs, but unlike them, the company remains the alpha in the group, something the others can’t say. For example, Samsung managed to dominate the mobile market in the last couple of years snatching the lead from the American giant. Moreover, Mr. Warren Buffet, the investment genius, endorsed American Express as an “excellent business” with staff that is both “talented and shareholder-oriented,” and this man puts his money where his mouth is. He owns 15.6% of the gigantic company.
Source: Star Tribune