Costco tests makeup, self-checkout lanes

Drug Store News,  May 23, 2005  by Doug Desjardins

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ISSAQUAH, Wash. -- Costco this summer will test a new line of cosmetics and self-checkout technology in select stores.

The chain's first foray into cosmetics is scheduled to start next month through a partnership with high-end supplier Borghese. "We're going to roll out a line of cosmetics sometime in June in about 60 locations," said Bob Nelson, vice president of investor relations and financial planning for Costco. "It's going to be a cobranded, private label line called Kirkland Signature by Borghese."

Nelson said the new line would feature about 10 items in popular categories like skin care and makeup. Costco will evaluate sales at the 60 pilot locations before making a decision on rolling out cosmetics to more stores.

Adding Borghese cosmetics will give Costco another name brand and help fuel its fast-growing pharmacy sales. Last year, the company registered $2.2 billion in sales of prescriptions and OTC health and beauty care products and now ranks among the top 10 pharmacy retailers in the country.

While it rolls out cosmetics, Costco also will expand its experiment with self-checkout lanes, with plans to add self-checkout in two stores next month in Fairfax, Va., and Issaquah, Wash. Costco began quietly testing self-checkout this spring in its Silverdale, Wash., and Chantilly, Va., stores.

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