Major ClientsWide moat

Costco Wholesale (COST) — moat facet

Eighty-two million paying customers, no concentration to disclose, and one number that decides everything: whether they renew.

Costco's 10-K contains no customer concentration table, because there is nothing to put in one. The customer base is 82.9 million paid memberships and 148.5 million cardholders as at the third quarter of fiscal 20261, each of them worth $65 or $130 a year plus whatever they carry out. No single household is a rounding error's rounding error. On the standard measure used across this collection — CoreWeave at 67% from one customer2, Nvidia at 22%3, Kioxia's largest at 20.4%4 — Costco's answer is zero.

Largest customer as a share of revenue67%CoreWeave22%Nvidia20.4%Kioxianone disclosedCostcoCostco's 10-K carries no customer concentration disclosure because there is nothing to put in one.
Zero concentration across 82.9 million paid memberships — diversified by name and correlated by circumstance, since a recession reaches all of them in the same quarter.

That is real diversification and it is worth less than it first appears, for two reasons. The first is that 82.9 million households sharing one continent, one currency and one set of interest rates are diversified by name and correlated by circumstance; a recession reaches all of them in the same quarter. Costco's own risk factors say as much, listing unemployment, consumer debt levels, housing weakness and reduced consumer confidence together5. The second is that the base is more concentrated than the headcount suggests: 38.7 million Executive members, 47.8% of the count, generate 73.6% of worldwide net sales6.

The relationship is also structurally unusual in a way that is easy to miss. Costco's customers pay before they buy. The money arrives as an annual fee, sits on the balance sheet as $3,157 million of deferred membership fees7, and is refundable in full at any time. There is no invoice, no credit terms, no receivable — Costco's $3,750 million of receivables are vendor rebates, pharmacy insurance claims and card incentives, not customer credit. The company therefore has the credit profile of a business with no customers at all, and the renewal profile of a business with one enormous contract that comes up every year, 82.9 million times.

The most instructive thing about the relationship, though, is what Costco does with the power it derives from having so many customers who cannot be individually lost. It has used it, at least once, on a party nobody else has managed to push: in 2016 it dropped American Express and made Visa the only credit network accepted in its American warehouses8. That is the one page in this file where a merchant, rather than a bank or a network, set the terms of a payment.

There is no concentration to measure, so the number that replaces it is the renewal rate. It is the renewal rate: 92.2% in the United States and Canada and 89.7% worldwide at the third quarter of fiscal 2026, from 92.3% and 89.8% at the end of fiscal 2025. It is the only feedback loop Costco has, and it reports once a year, 82.9 million times.

Moat trajectory: Holding steady

Paid memberships rose 3.3 million in a year while renewal rates slipped a tenth of a point in both measures. The base is growing and the retention is fractionally worse.

The number that tests this moat
Reported
Worldwide membership renewal rate
89.7% in Q3 fiscal 2026, from 89.8%

No customer is large enough to disclose; the business rests on tens of millions of members renewing. The worldwide rate slipping a tenth of a point at a time is the number to watch, since a renewal that stops is a customer lost.

Source: Costco Form 10-Q, Q3 fiscal 2026 ↗
Dig deeper
DIG DEEPER 01
Eighty-Two Million, and Not One That Matters
Diversified by name and correlated by circumstance — no customer can hurt Costco and one recession can reach all of them.
DIG DEEPER 02
The Executive Member Is a Different Customer
The tier that doubles the fee, produces three-quarters of the sales, and hands the member a certificate redeemable in exactly one place.
DIG DEEPER 03
Visa Is the Only Credit Card That Works
The one page in this collection where a merchant, rather than a bank or a network, set the terms of a payment — and the members simply got a Visa.
DIG DEEPER 04
The Business Member
The customer that shops on a spreadsheet, visits far more often, and has been growing at a quarter of the consumer rate.
References
  1. ReportedThe customer base is 82.9 million paid memberships and 148.5 million cardholders as at the third quarter of fiscal 2026, each of them worth $65 or $130 a year plus whatever they carry out.
    Costco Form 10-Q, quarter ended May 10, 2026 - MD&A (comparable sales +10% and +7% excluding fuel and currency, ticket +7% against frequency +2%, membership fees $1,373M, renewal 92.2% and 89.7%, gross margin 11.04%) — Q3 FY2026 and the first 36 weeks · publ. June 3, 2026 · source ↗
  2. ReportedOn the standard measure used across this collection — CoreWeave at 67% from one customer, Nvidia at 22%, Kioxia's largest at 20.4% — Costco's answer is zero.
    CoreWeave Form 10-K, fiscal 2025 — revenue $5.13B (+168%), net loss ~−$1.2B; customer concentration disclosed (largest customer ~2/3 of revenue) — FY2025 · publ. early 2026 · source ↗
  3. ReportedOn the standard measure used across this collection — CoreWeave at 67% from one customer, Nvidia at 22%, Kioxia's largest at 20.4% — Costco's answer is zero.
    NVIDIA Form 10-K, FY2026 — "For fiscal year 2026, sales to one direct customer represented 22% of total revenue and sales to another direct customer represented 14% of total revenue"; FY2025: one at 12% and two at 11% each; FY2024: one at 13%. Direct customers include OEMs, ODMs, distributors and system integrators; indirect customers (CSPs, Neocloud builders, AI model makers, enterprises, public sector) buy through them, and NVIDIA "estimate[s] some individually representing 10% or more of our revenue". "Our revenue is concentrated among a limited number of direct and indirect customers and this trend may continue." — FY2026 (ended Jan 25, 2026) · publ. February 2026 · source ↗
  4. ReportedOn the standard measure used across this collection — CoreWeave at 67% from one customer, Nvidia at 22%, Kioxia's largest at 20.4% — Costco's answer is zero.
    Kioxia Holdings Corporation, Annual Securities Report for the year from 1 April 2025 to 31 March 2026 (8th Period) — revenue ¥2,337,628M against ¥1,706,460M, gross profit ¥1,012,904M, operating profit ¥869,013M, profit for the year ¥554,490M; research and development cost ¥141,052M against ¥132,798M; purchases of property, plant and equipment ¥281,062M against ¥223,847M; operating cash flow ¥616,540M; proceeds from government grants ¥56,396M against ¥43,748M, from an approved ceiling of ¥150.0bn for flash production at the Yokkaichi and Kitakami plants with about ¥31.8bn not yet received. Revenue by application: SSD & Storage ¥1,362,638M, Smart Devices ¥759,978M, Other ¥215,012M — 'Other' including retail products and sales to the Sandisk group recorded through the three manufacturing joint ventures. Revenue by geography: Japan ¥263,252M, North America and Europe ¥1,217,643M, Asia ¥856,733M, with the United States ¥1,098,832M, China ¥381,857M and Taiwan ¥300,932M. Non-current assets: Japan ¥1,658,950M, North America and Europe ¥1,986M, Asia ¥6,298M. Major customers: Apple group ¥476,014M (20.4%), with the Sandisk and Dell groups omitted for the year as each fell below 10% of sales. Flash Partners Ltd., Flash Alliance Ltd. and Flash Forward LLC are accounted for as joint operations with 50.1% of the voting rights and equal decision-making rights shared with Sandisk. Net interest-bearing debt ¥552,085M against equity of ¥1,398,929M — a net debt-to-equity ratio of 0.39 times, from ¥931,035M against ¥737,565M and 1.26 times a year earlier; USD-denominated senior notes at 6.25% (2030) and 6.625% (2033); goodwill of ¥395,585M from the 1 June 2018 acquisition of the former Toshiba Memory Corporation. Bain Capital funds indirectly hold 21.87% and Toshiba Corporation 17.59% of outstanding common shares, both having sold substantial holdings during the year. Risk factors state that the Yokkaichi Plant is located in an area with a high risk of earthquakes and floods and the Kitakami Plant in an area severely damaged by the 2011 Tohoku Earthquake, and name US-China trade frictions and US tariff policy among factors that may materially affect the business. The company does not provide plans or progress reports for the overall fiscal year. — year to 31 March 2026 · publ. 2026-06 · source ↗
  5. ReportedCostco's own risk factors say as much, listing unemployment, consumer debt levels, housing weakness and reduced consumer confidence together.
    Costco Form 10-K, fiscal year ended August 31, 2025 - Item 1A Risk Factors (U.S. and Canada 86% of net sales and 84% of operating income, California 26% of U.S. net sales, cannibalisation, tariffs, supplier and site-acquisition risk, 'high market expectations') — FY2025 · publ. October 8, 2025 · source ↗
  6. ReportedThe second is that the base is more concentrated than the headcount suggests: 38.7 million Executive members, 47.8% of the count, generate 73.6% of worldwide net sales.
    Costco Form 10-K, fiscal year ended August 31, 2025 - Item 1 Business (membership counts and renewal rates, warehouse and gas-station counts, under 4,000 SKUs, Executive tier and the 2% reward, human capital and wages, competition, Kirkland Signature) — FY2025 · publ. October 8, 2025 · source ↗
  7. ReportedThe money arrives as an annual fee, sits on the balance sheet as $3,157 million of deferred membership fees, and is refundable in full at any time.
    Costco Form 10-Q, quarter ended May 10, 2026 - MD&A (comparable sales +10% and +7% excluding fuel and currency, ticket +7% against frequency +2%, membership fees $1,373M, renewal 92.2% and 89.7%, gross margin 11.04%) — Q3 FY2026 and the first 36 weeks · publ. June 3, 2026 · source ↗
  8. ReportedIt has used it, at least once, on a party nobody else has managed to push: in 2016 it dropped American Express and made Visa the only credit network accepted in its American warehouses.
    Retail Dive, 'Costco to replace its Amex card with Citi, Visa' - Citi became the exclusive issuer and Visa replaced American Express as the credit card network accepted in Costco's U.S. and Puerto Rico warehouses — Effective April 1, 2016 · publ. 2015 · source ↗
Sources
Generated September 23, 2026