Owning the GroundWide moat

Costco's occupancy structure is unusual for a retailer of its size and it is worth stating precisely. At the end of fiscal 2025 it operated 914 warehouses: 725 where it owns both land and building, and 189 where it leases land and/or building — of which 141 are land-only leases, meaning Costco owns the building¹. So the company owns the structure in 866 cases and the land in 725.

By segment: the United States and Puerto Rico, 512 owned of 629; Canada, 94 of 110; Other International, 119 of 175. Ownership is highest exactly where the business is oldest and the property most valuable.

What ownership buys is not an accounting flourish. It is the elimination of the single line item that has killed more retailers than competition has. A leased chain faces rent reviews, renewal negotiations at the landlord's option, and an occupancy cost that rises with local property values — which means a retailer's success in a location raises its own rent. Costco's occupancy cost is a fixed historical price plus depreciation, which is why property and equipment of $31,909 million² sits against a business doing $269,912 million of net sales.

It also changes what a downturn does. A leased retailer with falling sales has a rising fixed charge and limited ability to exit. Costco can hold a warehouse through a bad decade at close to zero incremental cost, and its balance sheet — $19,996 million of cash and short-term investments against $5,670 million of long-term debt at the third quarter of fiscal 2026³ — means it never has to.

Read the ownership ratio itself, 866 of 914 buildings. Watch it in each year's Item 2 table: a falling share would mean growth had moved to leased sites, which is what happens when the land is no longer available at a price that works.