Membership

After law school at the University of Southern California, Mr. Price started his career representing grocers and other merchants. With the temperament of a shopkeeper who obsesses over his customers and fusses over the smallest of details, in the 1950s Mr. Price began converting empty San Diego warehouses into members-only bazaars where for a small fee, shoppers could get everything from hosiery to cigarettes at wholesale prices. The key to the business, called FedMart, was simple: keep members renewing year after year.

Who was Sol Price

Spiritual founder of Costco, Sol Price, born in 1916, was the son of garment workers from Minsk, and belonged to the generation of displaced Jews and other Europeans who thrived in New York’s small businesses — the delis, candy shops and pawnshops of the Depression and postwar years. In the 1920s, the family moved to San Diego, where he went to high school.

Mr. Price had a gift for connecting with shoppers at a time of exploding prosperity and social change, but paradoxically, one of his rules was not making too much money.

“He grew up in a family of socialists. He was a capitalist. He liked to make money, but he was pro-union, pro-labor, pro-little guy,” said David Schwartz, who co-wrote “The Joy of Costco” with his wife, Susan. “Everything was about trust. He would rather lose your business than your trust.”

Costco

Through a series of mergers over the years, Sol Price’s FedMart became what we know as Costco in the 1990s.

It is still relationship-minded, and members seem satisfied, renewing at a rate of 93 percent.

By and large, Americans do not trust corporations. But when asked which companies they do trust, they consistently rank Costco near the top.

“They’re selling the same food everyone else is selling,” Mr. Smith said. “It’s not like the products are magical. But they created a culture.”

Sol Price wanted Costco members to feel respected and smart. The company remains known for its no-questions-asked return policy, high-quality products and cheerful customer service.

“We have created a treasure-hunt atmosphere,” said Jim Sinegal, the previous Costco chief executive, in an address to San Diego State University business students in 2017. “We try to create a sense of urgency, that if you see the product there, you better buy it, because chances are they won’t be there next time.”

“The idea is that you don’t feel that these are temptations,” said Ayelet Fishbach, a behavioral psychologist at the University of Chicago, Booth School of Business. “You’re getting a great deal.”

But, she added, “The question is, Do you actually need this? You probably don’t.”