Investors listening probably realize that the average consumer is feeling significant financial pain right now. Coca-Cola reported a rare drop in sales volume in the first quarter, for example, while fast food chains Restaurant brands (parent of Burger King) and Yum! Brands both reported a decline in same-store sales last quarter, despite offering several so-called “value” meals. Same discounter Dollar General is struggling to maintain revenue from its stores, let alone grow sales.

Before jumping to conclusions about all consumer-facing actions, know that a few companies are weathering these headwinds. Costco wholesale (NASDAQ: COST) is one of them. Indeed, it holds up well enough to justify an investment in the retailer’s warehouse inventory. Four bullish arguments stand out.

1. It is a reliable product, profitable producer

Costco is a membership-based club retailer. The company charges $65 or $130 per year (depending on your membership plan) to shop at its 861 discount stores. Although in its early days it mainly offered basic products consumer goods packaged in bulk, many of its products are now available in more user-friendly and more manageable sized packages. In other words, it feels more like a real grocery and general merchandise store than before.

Either way, it works. Not only the retailer If the company has managed to consistently increase its turnover for decades, it has also been equally successful in increasing its profits. There’s no reason to believe that Costco won’t be able to maintain this growth trend over the coming decades, either.

COST Income (quarterly) data by Y Charts

2. Costco stores are constantly improving foot traffic – and memberships

This continued progress is not just the result of building more and more stores. Once established, each store is able to reliably expand its reach within its geographic market.

The relevant metric is same-store sales growth or revenue growth for locations that have been operational for at least one year. Of course, this approach negates any revenue improvement that results solely from opening a new store.

As for how the company is performing on this front, take a look at the chart below. While the period between the start of 2020 and the end of last year was disrupted – for better and for worse – by the COVID-19 pandemic, the situation is now stabilizing. The company’s stores here and abroad have generated average sales growth of around 4% since the start of this year, far outpacing the decline in inflation. (Be aware that most other retailers simply aren’t producing this type of same-store sales growth at the moment.)

Data source: Costco Wholesale. Table by author. Sales figures are in the billions.

It should be added that membership growth also outpaces new store creation and population growth. Total paid subscriptions of 76.2 million at the end of August are 7.3% higher than last year’s figure, but the company only operates 3.3% of physical stores more than at the time.

3. The stock market rally has taken a break

Investors watching Costco’s stock will likely know that it has a history of moving steadily — if sometimes slowly — up. However, this has not been the case recently. Costco’s current stock price, near $890, is more or less where it was trading at the beginning of July. This is a rather unusual break.

But it’s also a buying opportunity. Don’t misread the message. Costco stock is certainly capable of suffering occasional setbacks. At some point in the future, it could find itself below a price of $890 again. However, based on history, there is more upside potential than downside risk.

4. This is exactly how consumers shop now

Finally, perhaps the biggest reason to buy Costco stock like there’s no tomorrow is the simple fact that many (if not most) people now buy the same way the retailer sells. This comes from membership-based stores offering real value even if its packaging isn’t always a convenient size.

This was not always the case. In the early days of warehouse club retailing, these stores didn’t carry everything, and much of what they offered was sold in impractically sized bulks. Consumers were also confused by the idea of ​​paying for the privilege of shopping at a particular store.

However, things are different now, for several related reasons. One of these reasons is simply that consumers are now accustomed to paying monthly or annual fees for a range of services. Netflix And Amazon Prime comes to mind, as does Interactive platoon and even some credit cards. This psychological barrier related to fees is now much easier to overcome.

The other reason why 76.2 million people do not hesitate to pay a annual access fee for Costco stores is that Costco responds to the way cost-conscious consumers think and shop now. They are price conscious, willing and able to adapt to Costco’s bulk packaging. But perhaps most of all, buyers now have access to the technology and data to help them find the best deal possible. That often ends up being Costco, giving it a competitive advantage amid changing consumer behavior.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. James Brumley holds positions at Coca-Cola. The Motley Fool holds positions and recommends Amazon, Costco Wholesale, and Peloton Interactive. The Motley Fool recommends Restaurant Brands International. The Motley Fool has a disclosure policy.