Amazon has emerged as a dominant force in the burgeoning e-commerce sector, but Costco still holds a key advantage over its retail rival, according to famed investor and Berkshire Hathaway vice chairman Charlie Munger.
“Costco, I do think, has one thing that Amazon does not. People really trust Costco to be delivering enormous values,” Munger said during the Daily Journal Corporation’s annual shareholder meeting, according to Yahoo Finance. “And that is why Costco presents some danger to Amazon. Because they’ve got a better reputation for providing value than practically anybody, including Amazon.”
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In February, Amazon revealed it had generated a record $386.1 billion in revenue in fiscal 2020 as homebound shoppers turned to digital options during the coronavirus pandemic. Costco, a traditional brick-and-mortar retailer that utilizes a membership-only model, reported $163.2 billion in revenue in its 2020 fiscal year, which ended last August.
|COST||COSTCO WHOLESALE CORPORATION||340.70||-1.45||-0.42%|
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Munger is a longtime proponent of the Costco brand, having served on the company’s board of directors since 1997. He also owns a significant minority stake in the company.
In November, a 13F filing revealed Berkshire Hathaway sold its entire stake in Costco, which was worth an estimated $1.3 billion at the time.
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Munger has a personal net worth of approximately $2 billion, according to Fintech Zoom.