A Costco Rival Just Opened a Megastore, and Membership

Costco has long ruled the warehouse club business, with roughly 143 locations in California alone and a member base built on bulk deals and loyalty. But a newer competitor near Los Angeles is starting to pull shoppers away, and it’s doing it with a business model that flips a few of Costco’s core rules.

Meet Resco Food Service. Located in a converted office building in the City of Industry, just outside downtown LA, the store opened in January 2024 and has been drawing attention ever since. Locals have taken to calling it the “Asian Costco,” a name that comes from its deep selection of Asian grocery items. SF Gate

What Makes Resco Different

On the surface, Resco looks a lot like the warehouse stores shoppers already know: towering shelves, bulk packaging, and industrial lighting. The store stocks more than 5,000 items, some stacked high on scaffolding-like shelving stocked with shrink-wrapped pallets. That’s a notably deeper inventory than Costco typically carries. Costco tends to cap its per-store selection at around 4,000 stock-keeping units, while Resco’s catalog runs past 5,000, giving shoppers more variety, though it has less of Costco’s curated, limited-SKU approach. SF Irish Star

The bigger difference is how you get in the door. Resco charges just $20 a year for a membership that unlocks discounts and special offers, compared to Costco’s $65 standard membership or $130 for its Executive tier. And unlike Costco, Resco doesn’t actually require a membership to shop there at all, while Costco won’t let anyone through the door without a scanned card. Irish StarIrish Star

That’s a meaningful shift. Membership fees are a huge part of Costco’s profit engine, and the fact that a rival is thriving without locking the door behind a paywall suggests there’s real appetite for the warehouse-shopping experience without the commitment.

Why This Matters for Costco

Costco’s member-first approach has long been central to its success, shaping not just prices but product selection and the overall shopper experience. That formula has worked: the company’s core membership fee structure keeps millions of shoppers coming back annually, and Costco is one of only a small handful of major retailers, alongside Sam’s Club and BJ’s Wholesale Club, that has built a business around subscription-based shopping. Verde IndependentIrish Star

Resco’s rise doesn’t threaten that model overnight, but it does chip away at one of its main selling points: value. A $20 annual fee is a much easier ask than $65, and removing the membership requirement altogether lowers the barrier even further for casual or price-conscious shoppers who might otherwise never set foot in a warehouse store.

The timing isn’t a coincidence either. Grocery prices have been climbing steadily, and shoppers are increasingly hunting for cheaper ways to stock up. U.S. food inflation rose 0.7% in a single month at the end of 2025, the sharpest monthly jump since late 2022, pushing annual food inflation to 3.1%, according to the Bureau of Labor Statistics. That backdrop is pushing more shoppers toward discount grocers and bulk retailers of every stripe, not just the household names. Yahoo Finance

What’s Next

Resco has already expanded beyond its original Los Angeles-area location as demand has grown, and it’s not the only regional player testing Costco’s dominance of the warehouse format. Whether Resco becomes a true national threat or stays a regional favorite, its growth is a sign that shoppers are willing to try alternatives when the price and access terms are right, especially in a moment when every grocery bill feels a little heavier than it used to.

For now, Costco’s scale, brand loyalty, and massive membership base give it a wide cushion. But stores like Resco show there’s room in the warehouse retail space for someone to compete on the very thing Costco built its reputation on: value.