Charlie Munger 《Munger Loved Costco—even Its Parking Spaces Were a Competitive Advantage》 When Munger talked about Costco, he often mentioned its low prices, culture, and membership model. In a 2023 interview, he also brought up something that sounds less like an investment term: parking spaces.

Charlie Munger
(Munger loved Costco—even its parking spaces were a competitive advantage)
When Munger talked about Costco, he often mentioned its low prices, culture, and membership model. In a 2023 interview, he also brought up something that sounds less like an investment term: parking spaces.
Costco’s parking spaces are 10 feet wide, while those in ordinary parking lots are commonly 8 or 9 feet wide. Wider spaces make it easier to open car doors, load and unload, and get shopping carts through. This alone doesn’t constitute a moat, but it shows how Munger viewed a company’s strengths: competitiveness isn’t just in the financial statements; it’s also in the friction customers encounter every time they visit.
Of course, the parking experience is only the entry point. What Munger truly valued was a whole set of trade-offs that worked together. Products were sold more cheaply, stores were larger and more efficient, and the membership model attracted customers who bought more while using rewards to encourage spending. The ultra-low markup policy passed savings on to customers, while a strong culture ensured these trade-offs did not easily drift. The hard part is that low markups leave little room for waste at every step. Purchasing, inventory, and store operations all have to keep pace; otherwise, low prices are merely a temporary promotion, not a lasting capability.
Membership is not simply a way to collect an extra fee. Costco’s 2025 annual report shows that the basic U.S. membership fee was $65, while the total fee for an Executive membership was $130. Executive members could earn a 2% reward on qualifying purchases, and the global renewal rate was 89.8%. Customers’ willingness to renew is what shows that low prices and membership value have formed a lasting relationship. Paying a membership fee upfront and then recovering its value through shopping also makes customers more inclined to consolidate their purchases. The retailer gains a more stable relationship with its members, while customers expect lower prices on goods. These interests are not naturally aligned; the promise has to be delivered on every visit.
But calling it a “good company” did not make Munger abandon his awareness of price. In a 2023 Daily Journal Q&A, Munger said he was a “rabid admirer” of Costco and would not sell a single share; he also explicitly noted that its price-to-earnings ratio of around 40 at the time was a problem. Being willing to keep holding does not mean it is worth buying at any price.
Put these two statements together, and the picture is complete. One reflects confidence in the quality of the business; the other, a constraint on the price one is willing to pay. Long-term holding and an expensive valuation are not contradictory: the former concerns what to do with an existing position, while the latter asks whether to invest new money. Confusing the two questions can make it easy to mistake “I like it” for “I’ll buy it at any price.”
When looking at Costco, don’t just copy the two words “low prices.” Look at how store efficiency, member relationships, and corporate culture support those low prices—and why customers choose to stay. Then ask one last question: What is the price of this good business today?
Munger was even willing to study parking spaces, but he wouldn’t let his fondness for a parking spot make him forget the price of the entire investment.