The Sneaky Reason Costco Doesn't Have Aisle Signs

In the majority of grocery stores, signs positioned above the aisles help shoppers navigate the wide selection. However, you might have noticed that Costco is lacking these guides. According to Robert Price of Price Club, the company that merged with Costco in 1993, this was a purposeful choice. When Planet Money hosts Robert Smith and Jacob Goldstein asked Price why this was, he revealed that the reason is a bit "manipulative." "I was adamant that we would not have signs telling people where things were because that would make it likely that they would wander through all the aisles and find other things to buy," Price explained. In response, Smith says the practice provides a "whole different philosophy of shopping" because many things are purchased rather than the single thing the customer may have been seeking out.

Due to the nature of the store, most members who visit may acquire a large number of items even without this tactic. Designed as a wholesale store for other businesses, Costco is known to offer bulk items at low prices, so long as shoppers pay an annual fee of $60. But does the lack of signage really add to the brand's success? While we don't have specific numbers about this, there are certainly ways Costco can capitalize on it.

Grocery stores use psychology to increase spending

It's a common practice for grocery stores to use clever tactics to trick you into spending more. One such method, as demonstrated by Costco, is getting shoppers to peruse sections of the store they didn't initially want to spend time in. Along with purposely omitting signage, stores often rearrange items so customers working from memory enter the wrong aisle, causing them to see additional products on the way. Many supermarkets place items they consider essential along the back wall, which also leads customers through unwanted aisles. This "forces you to go through the majority of the store to get to what you need," according to retail expert David Bakke.

Through a mixture of membership fees, clever positioning, and perhaps sheer signless confusion, Costco's overall revenue is continuing to increase by the year. In 2022, the company made $227 billion. It raked in $196 billion in 2021 and $166 billion in 2020.