Despite falling short of projected overall profits during the holidays, Costco has one intoxicating reason for optimism — its private-label alcohol line is booming, with a 46 percent rise in sales in the past five years, according to Bloomberg.
The wholesale-club chain’s Kirkland Signature liquor brand has gained a following, with some customers comparing the products favorably to top-shelf alcohol. According to David Schick, lead retail analyst at Consumer Edge Research, the use of “very high-end producers” allows the company to set itself apart from other private labels.
“Private label continues to grow as a dominant strategy in retail — especially when it migrates from being a ‘label’ to more of a ‘brand,’ which Kirkland has done,” David Bassuk, managing director at consulting firm AlixPartners in New York, told Bloomberg. “Now it’s a well-known name and gives the consumer a perception of value and a good deal.”
According to Annette Alvarez-Peters, manager of the beverage alcohol division at Costco, the private label beverages are produced by “various manufacturers.”