Store visit at American retail giant Costco Wholesale in Sweden
In a retail landscape where large-area formats are steadily losing ground across Europe, Costco is expanding with a model that defies the trend. The US wholesale giant will open its second Swedish warehouse near Malmö in July 2025. A visit to the first and only Costco location in Northern Europe near Stockholm reveals the strategy behind its growth: no-frills operations, limited assortment, and bulk-value pricing across 13,300 square meters of sales area.

Sebastian Rennack
international retail analyst
Aletos Retail
Costco continues its selective European expansion with a second Swedish warehouse set to open near Malmö in July 2025. The move follows its Northern European entry three years ago with a location near Stockholm and adds to a limited but growing footprint on the continent. As of August 2024, Costco operated 29 warehouses in the UK, five in Spain, two in France, and one each in Iceland and Sweden.
The wholesale club ranks fifth in the National Retail Federation’s 2025 list of top global retailers, based on net sales of 250 billion US dollars. Its financials for the fiscal year ending August 2024 show a net income margin of 3.0%, underlining solid profitability despite its low-price positioning. Globally, the company runs 890 warehouses, with newly opened stores in 2024 averaging 170 million US dollars in annual sales, while older locations opened before 2015 generate closer to 280 million.
Costco’s business model is built around paid membership, targeting both small and medium enterprises and private households. Membership is globally valid, both in-store and online via Costco.com. While the assortment spans groceries, fresh products, and non food merchandise, its merchandising strategy focuses on large packs and limited choice. As a result, stores carry only around 4,000 SKUs despite averaging 13,500 square meters of sales area. Roughly one-third of sales are generated under its cross-category private label Kirkland Signature, which includes food and non-food alike.
Beyond retail, Costco integrates upstream operations through its own manufacturing division, covering areas such as food packaging, meat processing, optical services, and jewelry distribution – allowing for tighter cost control and product differentiation across key categories.

The Costco warehouse in Arninge near Stockholm features a sales area of 13,300 square meters. It offers a broad assortment in a classic warehouse layout

Non-food categories are prominently placed at the entrance. TVs, apparel, and seasonal items greet customers first

Products are presented in a no-frills environment using industrial high-rack shelving. The layout emphasizes efficiency over aesthetics

Apparel is displayed simply, with trouser sizes color-coded for easy selection. The presentation supports quick shopper decisions.

The textile section prioritizes operational efficiency. Items are stocked in bulk without decorative elements.

Costco follows a strict one-SKU-per-pallet policy. This simplifies restocking and maximizes volume turnover

Promotional displays also follow the “mass sells mass” principle. Bulk packaging reinforces the value message

Large packs are standard, as seen with nets of five avocados. The bulk approach supports Costco’s price-value strategy

The bakery offer is compact, but custom cake orders and visible production attract customers. The confectionery kitchen is a standout feature.

Fresh categories are all self-service, with backroom production visible through glass walls. This setup conveys freshness and transparency.

High hygiene standards are emphasized in all fresh production zones. The open layout builds trust in product quality.

Many items in the fresh area are convenience-focused. Ready-to-eat fruit platters and prepared meals dominate.

Kirkland Signature is present across all departments, including fresh convenience. The brand reinforces Costco’s private label strength.

Kirkland Signature also covers food-to-go, such as artisan pizzas made on site. Dozens of such SKUs target families and bulk buyers.

Dairy and cheese are merchandised in shelf-ready packs with large pack sizes. Costco favors speed over variety in these categories.

Beverages are stocked along multiple straight pallet aisles. The layout ensures high throughput and visibility

End-of-aisle pallets in ambient categories signal aggressive pricing.

Wide, brightly lit aisles maintain a warehouse feel. There is no ambient music or decorative signage

Pack sizes stand out compared to other Swedish grocers. Rapeseed oil in 10-liter bottles exemplifies the bulk format

Shopping carts are oversized to accommodate large-volume purchases. This supports Costco’s bulk-selling model

More than a dozen product tastings are offered in ambient departments. Sampling encourages trial of large-pack items.

Toward checkout, Costco clusters categories related to health. This includes cosmetics, baby care, and wellness services.

The pharmacy sells prescription drugs for humans and pets. It is staffed by qualified healthcare professionals.

Costco uses a three-person checkout system: one unloads, one scans, and one bags. Carts are split from customers for efficiency.

A food court with seating is located in front of the checkout area. Popular items include pizza and hot dogs – produced in-house.

The integrated tire center allows customers to get tires changed while they shop. It is located near the store exit

Costco incentivizes member recruitment with vouchers. Referrals receive money-off and foodservice coupons.
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