Because Costco is able to buy merchandise from its suppliers in such large quantities, it can flex its bargaining power to lower the per-unit cost of goods. A premium valuation Costco shares have performed extremely well over the past five years, rising 161% (as of March 17), absolutely trouncing the broader S&P 500's total return of 57%. Even in the face of elevated inflation that is forcing people to stretch their budgets, it was very encouraging to see that traffic at Costco's warehouses was up 5% in the latest fiscal quarter.