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Warren Buffett explains how Costco is dominating in one crucial area (COST)

Warren Buffett explains how Costco is dominating in one crucial area (COST)
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Warren Buffett sees Costco as a dangerous competitor in the retail space, due in large part to its explosive private-label brand Kirkland.




In an interview with CNBC, Buffett cited Kraft Heinz's 2018 sales of $26.3 billion, compared to sales by Costco's Kirkland brand, which reached $39 billion.




"Here [Kraft Heinz] are, 100 years plus, tons of advertising, built into people's habits and everything else," Buffett said. "And now, Kirkland, a private label brand, comes along and with only 250 or so outlets, does 50% more business than all the Kraft Heinz brands."



Costco's Kirkland brand is dominating the packaged-goods space, according to Warren Buffett.
"The packaged-goods brands [are] losing some ground against the retailers," Buffett said in an interview with CNBC.
According to Buffett, the plethora of packaged-food icons in Kraft Heinz's portfolio are struggling to compete with private-label brands at retailers such as Walmart and Costco. These private-label brands have been winning over customers with lower prices as the stigma surrounding generic brands has lifted in recent years.
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