You've probably walked into a Costco and felt that immediate, specific sensory overload. The smell of rotisserie chicken. The towering pallets of 48-count toilet paper. The $1.50 hot dog combo that refuses to succumb to inflation. But if you’re standing in the middle of a massive warehouse in New Jersey or Florida asking yourself where was Costco founded, the answer isn't as straightforward as a single dot on a map.
It’s a bit of a trick question.
Most people assume it started in a sleek corporate office in Seattle. They aren't entirely wrong, but they aren't exactly right either. The Costco we know today is actually the result of a 1993 "merger of equals" between two massive rivals: Costco Wholesale and Price Club. This means the company’s DNA actually traces back to two different cities, two different founders, and a converted airplane hangar that changed retail history forever.
The San Diego Roots: It All Started in a Hangar
Before there was a "Costco," there was Price Club. If you want to get technical about the birth of the warehouse model, we have to talk about Sol Price. In 1976, Sol and his son Robert opened the first Price Club in San Diego, California. They didn't build a fancy department store. Instead, they took over an old airplane hangar previously owned by Howard Hughes on Morena Boulevard.
It was gritty.
The floors were concrete. The shelves were industrial. Originally, they only wanted to sell to small businesses to help them get inventory at wholesale prices. But they quickly realized that if they let "regular" people in for a small annual fee, the volume would skyrocket. This was the lightbulb moment. By 1980, Price Club was a massive success, proving that people were willing to drive out of their way and pay for the privilege of shopping in a drafty warehouse if the prices were low enough.
The Seattle Explosion: Where Was Costco Founded Specifically?
While Sol Price was busy revolutionizing San Diego, a former Price Club executive named Jim Sinegal was taking notes. Sinegal teamed up with Jeffrey Brotman, a Seattle attorney, to launch their own version of the concept. On September 15, 1983, they opened the first-ever Costco Wholesale warehouse.
Where was it? It was located at 4401 4th Avenue South in Seattle, Washington.
This is the "official" answer to where was Costco founded. While Price Club had the head start, Sinegal and Brotman refined the model. They focused heavily on employee satisfaction and a limited selection of high-quality items. They didn't want 50 types of ketchup. They wanted the best ketchup at the lowest price.
The growth was explosive.
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Within just six years, Costco became the first company to grow from zero to $3 billion in sales in such a short timeframe. They were the scrappy newcomers from the Pacific Northwest taking on the established giants. Seattle provided the perfect backdrop—a city with a burgeoning tech and coffee scene that appreciated a "no-frills" but high-value shopping experience.
The 1993 Handshake That Changed Everything
By the early 90s, Costco and Price Club were locking horns. They were competing for the same customers and the same real estate. Rather than fighting a war of attrition that might have left both companies bankrupt, they did something rare in the business world. They joined forces.
In 1993, the companies merged to form PriceCostco.
At the time of the merger, Price Club was actually larger, with 94 locations compared to Costco's 88. However, the management styles differed. Sol Price was a brilliant pioneer, but Jim Sinegal was an operational genius. Eventually, the "Price" name was dropped from the storefronts, and the company rebranded simply as Costco in 1997. Even though the Price Club name vanished, the San Diego influence remains a massive part of the company's culture. You can still visit that original San Diego hangar today—it’s still a functioning Costco.
Why the Location Mattered
Seattle and San Diego aren't just random spots on a map. These locations influenced how Costco treats its "members." In the 70s and 80s, these were hubs of innovation. The founders realized that by charging a membership fee, they could cover their entire overhead.
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Think about that for a second.
Every penny you pay at the register goes toward the cost of the goods and a tiny sliver of profit. The actual profit the company makes mostly comes from the membership fees you pay once a year. This allows them to cap their markups at 14% or 15%. Compare that to a traditional grocery store or department store where markups can hit 30% to 50%.
The Kirklands Connection
You can’t talk about Costco’s origins without mentioning Kirkland, Washington. While the first warehouse was in Seattle, the company moved its headquarters to the nearby suburb of Kirkland in 1987. This is exactly why their private label is called "Kirkland Signature."
Even though the corporate headquarters eventually moved again (this time to Issaquah, Washington, in 1996), they kept the name. It had become a badge of quality. It’s funny to think that a multi-billion dollar brand is named after a small city in the Pacific Northwest simply because that’s where the office happened to be during a growth spurt.
Disproving the Myths
A lot of people think Costco was a spin-off of Walmart or Sam’s Club. That’s totally backwards. Sam Walton, the founder of Walmart, actually admitted in his autobiography that he "borrowed" (his words) much of the warehouse concept from Sol Price.
He literally visited Price Club, saw what Sol was doing, and decided to launch Sam’s Club in 1983—the same year Costco started.
Another common misconception is that Costco was founded by a giant conglomerate. Nope. It was started by individuals with a very specific, almost fanatical devotion to a simple idea: take care of your employees, keep your costs low, and the customers will follow. Jim Sinegal famously answered his own phone and wore a name tag just like the guys pushing carts in the parking lot.
What This History Tells Us About Today
Knowing where was Costco founded helps explain why they do the weird things they do. Why do they check receipts at the door? Because it started as a "club" for businesses where inventory control was everything. Why is the rotisserie chicken in the very back of the store? Because they want you to walk past every other item first.
It’s a strategy born from the industrial parks of San Diego and the rainy streets of Seattle.
The warehouse model wasn't designed for comfort. It was designed for efficiency. By stripping away the fancy lighting and the expensive marketing budgets, they created a retail cult. Honestly, it’s one of the few places where a billionaire and a college student might be buying the same gallon of olive oil.
Moving Forward: How to Use This Knowledge
If you’re a fan of the brand or a business student, there are actual takeaways from the Costco origin story. It’s not just trivia.
- Visit the Landmarks: If you're ever in San Diego, swing by the Morena Boulevard location. It’s a pilgrimage site for retail nerds. You can see the bones of the original airplane hangar.
- Look for the "Signatures": Now that you know the Kirkland name comes from a Seattle suburb, look at how many products carry that label. It’s often the same high-end product as the national brand, just in a different box.
- Watch the Stock: If you're an investor, understanding that Costco's revenue is tied to membership retention rather than just "selling stuff" is key. Their renewal rates are usually over 90%. That’s a level of loyalty most brands would kill for.
Costco wasn't just "founded"—it was forged through a merger of two different philosophies that happened to agree on one thing: the customer deserves a fair deal. Whether you're in that first Seattle warehouse or a brand new one in China, that original 1983 DNA is still there.
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Next time you’re eating that $1.50 hot dog, remember you’re participating in a retail experiment that started in a drafty hangar in Southern California and a warehouse in South Seattle. It’s a bit of history you can actually taste. To see how this history impacts their current operations, you can look into their latest quarterly earnings reports which detail their continued expansion into international markets like Japan and Iceland, proving the Seattle model works anywhere.
Check your local warehouse's "Opening Date" plaque near the entrance next time you visit. Many of the older locations still take pride in their place in the company's timeline. You might find you're shopping in a piece of business history without even realizing it.