Kirkland's Reluctant King: How Jim Sinegal Built Costco on Luck, Loyalty, and Saying 'No'

The Costco co-founder reveals the battles behind the $86 billion Kirkland brand, the mentor who shaped him, and why he rejected the company's wildly successful gas business eight times.

Jim Sinegal, the straight-talking co-founder of the retail behemoth Costco, has a simple assessment for anyone successful who doesn't acknowledge a dose of good fortune: "They're a fool." By his own account, Sinegal’s lifetime of luck began in 1954 with a one-day gig unloading mattresses at Fedmart, a discount pioneer. That single day stretched into 23 years under the tutelage of Sol Price, a man Sinegal still calls "the smartest person I've ever known." This deep, decades-long apprenticeship in the trenches of value retail laid the groundwork for Costco, the members-only warehouse club he'd launch in 1983 with Jeff Brotman, and ultimately, for Kirkland Signature – the $86 billion private label powerhouse that now defines the brand as much as its bulk pallets and $1.50 hot dogs.

After decades working for Price, first at Fedmart and then at Price Club (which Price founded after selling Fedmart), Sinegal felt a restlessness. "I thought to myself, you know, really I'm not gonna be happy just doing what I'm doing here," he recounted to The Wall Street Journal. Seeing the runaway success of the Price Club model, he and Brotman seized the opportunity. Raising capital was eased by pointing to Price Club's prosperity, but success wasn't instant. "We had to fight our way through this," Sinegal admits, convincing shoppers to pay a fee simply for the privilege of entering their stores.

Perhaps one of the most consequential fights was internal, over the idea of a house brand. Initially, Costco, like Price Club, catered heavily to small businesses, and private labels weren't on the radar. But observing market trends – falling commodity costs alongside rising brand prices – presented an obvious, if controversial, path. "There was some reluctance... everybody saying, you know, are we going adrift here?" Sinegal remembers. The ghost of past private label failures loomed large; many retailers had diluted their own brands with tiered quality, ultimately "killing the enthusiasm" for store brands. Sinegal himself had seen this play out during his Fedmart years.

But studying international successes like Loblaws in Canada and Tesco and Sainsbury's in the UK revealed a different approach: deep commitment and high standards. "We said, well if we're gonna do this let's have some standards," Sinegal declared. The nascent Kirkland Signature wasn't conceived as a cheap alternative, but as a brand promising quality equal to or better than national brands. Interestingly, the obvious starting points – staples like ketchup and mayonnaise – often flopped against entrenched giants like Best Foods. Success came in unexpected categories, driven by rigorous quality control.

Maintaining that quality became Sinegal's obsession, symbolized by the legendary "Green Ink" meetings. Final product approval landed on his desk. "I always have a green pen," he explained, "and so the final approval on the products would come to me and I would initial it. In green ink." It was a tangible manifestation of a core philosophy: authenticity matters. "You can't say 'People are our most important product' and hang signs all over the place... and then treat them like shit," Sinegal stated bluntly. "The same thing is true about the quality of the products... Your customers or your suppliers are going to see that you don't really mean it when you let them come down on the quality." This relentless focus transformed Kirkland Signature into arguably the most successful private label in history, now accounting for roughly a third of Costco's staggering sales.

Yet, Sinegal’s famous intuition wasn't infallible, nor was his initial reaction always embrace. The prime example? Costco's wildly profitable gasoline business. Facing a vertically integrated industry where oil companies controlled everything down to the station pump, making profits was notoriously difficult. Two persistent executives pitched Sinegal on testing gas stations. He rejected them. They came back. He rejected them again. "They had to come to me 8 times to get me to even try one place with a test," he confessed. He warned them of the pitfalls, but they saw shifts in the market he hadn't. "Well, they were right. It turned out that they were successful right off the bat. I had turned them down so many times I couldn't take credit for it."

This blend of deep-seated conviction, cautious skepticism, and ultimate willingness to trust his team underpins the Costco culture Sinegal fostered. Though he stepped down as CEO over a decade ago, the 89-year-old still occasionally comes into the office, echoing the work ethic of his mentor, Sol Price. Their relationship endured a "falling out" when Sinegal left to launch the competing Costco ("He was not very happy with it"), but they eventually reconciled, sharing dinner just nights before Price died.

Sinegal's journey – from a temporary stock boy to the architect of a global retail empire built on value, quality, and a surprising amount of internal debate – serves as a masterclass in long-term vision. He credits luck and mentorship, but his relentless focus on core principles, embodied by that simple green pen initialing Kirkland products, forged a legacy that continues to define value for millions worldwide. He may admire competitors like Trader Joe's ("fantastic... terrific company"), but his focus remains unwavering, rooted in the lessons learned over a lifetime in retail: build it right, mean what you say, and sometimes, the biggest wins come only after you've said "no" – repeatedly.