Costco's revenue comes from their membership fees and their ability to strongarm suppliers to give them favorable terms (eg. Costco is one of the largest alcohol importers in the US and tends to strongarm LVMH).

I love Costco (I practically grew up at Costco as a kid), but their ICP is not the kind of person who shops at Dollar General or is on SNAP - it's very much targeted at the 50th percentile income bracket and above [0].

And this is why PE has taken over the dollar market segment - because it's a trash business that no one else wants to service over the long term. PE is basically the last resort if a business cannot raise capital from traditional avenues, and leadership and investors want to exit. For y'all graybeards think of "Sam Vimes Boots theory".

Mine Safety Disclosures did a great overview on Costco's operating model a couple years ago [1].

[0] - https://www.businessinsider.com/how-costco-sams-club-shopper...

[1] - https://minesafetydisclosures.com/blog/2018/6/18/costco