The growing share of private label brands, international expansion and e-commerce strategy will further aid growth.
Costco maintains its strength on this front by offering private label brands and bulk purchases.
FORBES: Costco's Value Focus And Membership Growth Support $110 Stock
The private label brands have low prices, higher margins and are comparable in quality to national brands.
FORBES: Costco's Value Focus And Membership Growth Support $110 Stock
It offers a number of private label brands such as Kirkland Signature that have high value associated with them.
This includes an extensive collection of company-owned private label brands, which offer value priced alternatives across numerous merchandise categories.
One of the latest additions to its pool of private label brands is Green Mountain Coffee coffee cups.
FORBES: Costco's Value Focus And Membership Growth Support $110 Stock
The retailer has been increasing the penetration of private label brands within its merchandise by about 0.5% to 0.75% annually.
FORBES: Costco's Value Focus And Membership Growth Support $110 Stock
Robert Drbul of Lehman Brothers, an investment bank, estimates that private-label brands are 10-15% more profitable.
If so, the future for private-label brands may well be outside their parent companies' doors.
Mr Cohen predicts that department stores will respond by creating stand-alone shops for their private-label brands and selling their wares in other stores.
The firm says it will continue to acquire luxury brands such as Kate Spade, which it bought last December, to focus on customers who find private-label brands unappealing.
Furthermore, private-label brands do not appeal to all buyers.
But Belling and cofounder Pat Turpin, an ex-investment banker who managed private-label brands for Costco, needed to get the snack out there fast before they could persuade chains like Safeway and Whole Foods to clear shelf space.
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For brand owners and innovators it has been increasingly difficult to differentiate on functional features and benefits to get ahead of competitive brands and private label.
The chain eliminated all private-label sunglasses and now focuses on only 20 brands--40% of them made by Luxottica (up from from 15% a year ago).
According to the WSJ, stores have been increasing the prices on their private-label foods faster than the prices of the equivalent national brands.
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The struggles of these companies and their brands are the fallout of the growth of private-label goods and the rise of hard discounters like Germany's Aldi and Lidl chains.
Private-label work carries other risks, such as losing margins on your brands when retailers see you're producing similar goods cheaper for someone else.
The emphasis for Treehouse is on the private label business, a segment that thrives during tough economic times as customers become more inclined to switch from national brands to store brands.
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