Here's Why Costco's Kirkland Brand Is So Popular Right Now

Anyone who regularly shops at Costco knows about the key to its success — its Kirkland Signature line. Customers who frequent the warehouse club chain have been raving about the private-label products for years, and now the secret's out. At the beginning of the COVID-19 pandemic, in early 2020, more Americans found their go-to brands were sold out. In addition, many shoppers were trying to keep to a tight budget on their grocery runs, so they increasingly turned to alternatives, such as the Kirkland brand.

Even though Costco's sales as a whole may have slumped at the beginning of the pandemic, the company saw a massive leap in its Kirkland sales. "We've seen a huge increase in private label," said Richard Galanti, chief financial officer at Costco, (via CNN in May of 2020). In particular, he said toilet paper, cleaning supplies, and packaged foods were some of the most sought-after Kirkland products.

Costco's Kirkland brand is often cheaper than name brands

Kirkland and other private labels were doing well because, amid shortages and a steep increase in demand, stores were running out of stock on certain products. This means empty shelves when customers came looking for name brands. With no other option, many shoppers experimented with store-brand products for the first time.

Another factor in Kirkland's newfound popularity has to do with cost. Private-label products are often cheaper than regular consumer brands. This makes a difference in an economy where 20.5 million jobs were lost in April 2020 — resulting in an unemployment rate of 14.7% — the worst since the Great Depression (via ABC News). With so many out of work and low on funds, the lower price of the Kirkland line and other store-brand products like it has been attracting shoppers who have never used them before.

According to a survey conducted in March 2020 by research firm AlixPartners, out of more than 1,000 consumers, around a quarter have tried private-label brands for the first time. The survey also revealed that at least 30% of these newcomers to private-label products plan on sticking with them. So, the popularity of Kirkland products looks set to last.

The number 1 Kirkland product is toilet paper

With the success of Kirkland products, one wonders which items are the brand's best sellers. The number one item may surprise you. According to Fool, Kirkland's top item is Kirkland Signature Bath Tissue. That's right, the same toilet paper that was the subject of a viral recall hoax back in 2020 (via Business Insider). During the pandemic, item shortages led to unruly situations at stores like Costco. It has been the top item for Costco's signature brand, with a reported billion rolls sold yearly. 

While toilet paper is excellent, another big part of Costco's business is groceries. Regarding food, fans can't get enough of the Kirkland Signature Hickory Smoked Bacon. Like toilet paper, the highly-rated bacon is cheaper on average than name-brand competitors. Another popular food item is the Kirkland rotisserie chicken. The fresh and hot chicken makes any dish taste better with simplified meal planning. Another noteworthy part about the rotisserie chicken is that Costco loses money each time they sell one. Employing a tactic called 'loss leading,' the company accepts a loss on the item in hopes consumers will buy other items to make up for what was lost, according to the American Economic Association. Boosting this strategy, Costco places the chickens toward the back of their large store. And, while all of these are just a few of Kirkland's best sellers, they highlight the growing popularity of store brands.

The rise of the store brand

Kirkland is not alone in its success as a store brand. With rising costs negatively impacting the average American household, many families are shifting their consumption habits to save on expenses (via Forbes). This is especially true when it comes to groceries. As many opine about the cost of eggs in 2023, groceries generally have been ticking up as of late (via CNN Business). As a result, store brands see an increase in sales. According to PLMA, store brands hit a record high of $199 billion in sales in 2021.

By offering high-quality ingredients at affordable prices, Kirkland's popularity has helped Costco increase its members. As of November 2022, the big box department store has amassed over 120.9 million members. According to Zippia, Costco has seen its annual revenue rise every year since 2011. As Kirkland's offerings continue to draw more and more consumers, name-brand items will have significant competition in the marketplace.