If you‘re one of the 105 million Costco members worldwide, you‘ve likely noticed the prominence of one particular brand as you navigate the cavernous warehouse aisles: Kirkland Signature. From groceries to housewares, Costco‘s private label has earned a cult following for offering high-quality products at unbeatable prices. In fact, Kirkland now accounts for nearly a third of Costco‘s annual revenues, which topped $166 billion in 2020. (Source)
One Kirkland category that epitomizes the brand‘s value proposition is its basic apparel, especially T-shirts. With their heavyweight cotton, generous fit, and $4 per shirt average price, Kirkland tees have become a go-to for everyone from dads to college students. The internet is full of rave reviews declaring them the "best T-shirt ever" and a "[hero product that‘s] worth the price of a membership."
But with Costco‘s notoriously secretive sourcing practices, the question remains: who exactly is making these popular tees for the Kirkland label? While the wholesale giant may never reveal its full supplier roster, a look at global garment supply chains, Costco‘s known manufacturing practices, and the product‘s specs yields some clues.
The Kirkland Signature Brand and Costco‘s Private Label Dominance
To understand Kirkland‘s T-shirt sourcing, it‘s key to look at how Costco‘s private labels fit into its larger business model. While other retailers use house brands primarily to diversify product mix and capture more price-sensitive shoppers, at Costco the Kirkland label is core to its value proposition.
"Kirkland Signature is a brand in its own right," Richard Galanti, Costco‘s Chief Financial Officer, told investors. "There are many items that we add the Kirkland Signature label to that…could already have a great brand on it, but [the label] means even more value." (Source)
Across departments, Costco caps its product markup at 15%, while most retailers go up to 25% or higher. (Source) For Kirkland products, Costco aims even lower, averaging just a 10-12% markup. (Source) By working directly with manufacturers, cutting out the middleman, and streamlining logistics, Costco can secure the best prices from suppliers and pass more of those savings on to customers.
This focus on simplicity, efficiency, and continuous improvement is how Costco keeps growing Kirkland‘s share of its total business. In 2020, Kirkland products made up 31% of Costco‘s sales, up from 26% five years prior. (Source) Apparel basics like T-shirts are a cornerstone of the Kirkland lineup.
Deconstructing the Kirkland Signature Men‘s Crew Neck T-Shirt
Walk into any Costco and you‘ll likely find a stack of Kirkland men‘s crew T-shirts prominently displayed. The most common variety comes in a six-pack of white 100% cotton tees for $19.99, or about $3.33 per shirt. Costco also sells black, heather gray, and navy versions, as well as V-neck and extra-soft Pima cotton variations.
What sets Kirkland tees apart is their construction. Compared to bargain multi-packs from the likes of Hanes or Fruit of the Loom, Kirkland T-shirts are noticeably thicker, weighing in at a hefty 6.75 ounces per square yard of fabric. (Source) Most mass market T-shirts use lighter 4.5-5 oz fabric.
The heft comes from a dense 18-singles yarn, meaning 18 yarns are spun together into a single thread for a tighter, smoother weave. Cheaper tees use up to 50% polyester, but Kirkland uses 100% ring-spun cotton for enhanced breathability and softness. Shoulder-to-shoulder taping and double needle-stitching at the neck and armholes ensure the shirts keep their shape wash after wash.
Customers rave about Kirkland tees‘ quality and fit. "They are a nice thick material, as opposed to those semi-transparent T-shirts you can get at […] lower-quality stores," one satisfied reviewer writes. "Nice thick collar that doesn‘t lose its shape. They keep their color and size extremely well after many washes."(Source)
Combine that with Costco‘s generous return policy – members can return Kirkland products at any time for any reason – and it‘s no wonder the tees have reached cult status.
Where Costco Sources Its Kirkland Signature Products
Given the specs, materials and construction that go into Kirkland T-shirts, it‘s clear Costco works with experienced, well-equipped manufacturers to produce a premium product at a value price. But the question remains: where in the world are these shirts being made?
Costco is notoriously tight-lipped about its suppliers and manufacturing partners. Obscuring that information is a key part of its competitive strategy, as it keeps rivals from knowing exactly how Costco gets such low wholesale prices. With Kirkland products, there‘s extra incentive to safeguard those relationships, since Costco collaborates so closely with suppliers on product development, packaging, and logistics.
"We do not disclose the names of our suppliers," Costco states in its Supplier Code of Conduct. "We believe our suppliers‘ right to privacy should be respected."(Source)
However, there are some clues based on Costco‘s global footprint and supply chain standards. According to its supplier diversity statement, Costco currently sources its goods from the United States, Canada, Mexico, Brazil, Europe, Korea, Japan, Taiwan and Australia. (Source) For labor-intensive basics like T-shirts, countries with lower production costs are the most likely candidates.
In its SEC filings, Costco acknowledges that "some type of manufacturing" is done in Bangladesh, China, Guatemala, the Philippines, Indonesia, and Vietnam. (Source) While not definitive, this list provides a window into the regions where Kirkland tees may originate.
Following the T-Shirt Supply Chain: Likely Countries of Origin
China has long been the world‘s largest garment exporter, thanks to its expansive textile production infrastructure and skilled, low-cost labor force. More recently, rising wages in China have pushed many apparel brands to shift more of their basic manufacturing to Southeast Asian countries like Vietnam, Indonesia, and Cambodia.
However, given Costco‘s long-standing supplier relationships in China and the country‘s still-dominant position in cotton product manufacturing, it‘s very likely that a meaningful percentage of Kirkland T-shirts are made by Chinese producers. In fact, many large Chinese manufacturers have set up state-of-the-art, highly automated T-shirt and underwear factories to stay competitive even as labor costs rise. (Source)
Bangladesh is another strong contender as a source for Kirkland tees. The country is the world‘s second-largest garment exporter after China, with 80% of those exports being cotton products like T-shirts.(Source) With its large skilled workforce and established production base, Bangladesh is a major supplier for many value-focused brands.
Vietnam, Indonesia, Honduras, El Salvador, and several other countries known for their garment manufacturing industries are also part of Costco‘s orbit and could potentially be making Kirkland tees. A small portion of shirts may even be made in the U.S. in highly automated factories. Ultimately, to meet its huge demand, Costco likely relies on a diverse network of suppliers in various countries that can reliably produce a high-quality product at the right price.
How Costco Ensures Kirkland Products Meet Its Standards
Costco maintains that no matter where its products are made, suppliers are held to the same high standards for quality, ethics, and sustainability. "We‘re not going to skimp on the product because we want the product to be the very best," Costco co-founder Jim Sinegal has said. "When you see Kirkland Signature, you‘re going to know that the quality is going to be there."(Source)
To find and approve suppliers, Costco has a dedicated Quality Assurance team that vets factories and audits them regularly for safety and legal compliance. Costco‘s Supplier Code of Conduct lays out requirements for all facilities producing its products, including fair wages, health and safety measures, environmental protection, and a ban on child and forced labor. (Source)
When developing a new Kirkland product, Costco‘s buyers and QA team will often visit suppliers‘ factories personally to understand their production process and capabilities. Suppliers must submit product samples and are responsible for testing products at certified third-party labs to ensure they meet all applicable regulations and Costco‘s standards.
Once a product is on shelves, Costco reviews member feedback and return data to continuously monitor product quality and determine if changes need to be made. Its meticulous QA process and close collaboration with suppliers means any issues that crop up can be quickly identified and resolved.
For example, in response to growing concerns about chemicals and sustainability in the textile industry, Costco has committed to working with its suppliers to eliminate potentially harmful substances from its apparel production. The company has set a goal of achieving zero discharge of hazardous chemicals throughout its supply chain by 2025.(Source)
Kirkland Signature vs. Other Leading T-Shirt Brands
Of course, Costco isn‘t the only game in town when it comes to budget-friendly basics. To gauge how the Kirkland tee truly stacks up, it‘s worth comparing its specs and user ratings to similar offerings from competitors.
Hanes Beefy T, a popular workwear tee, is similar in weight (6.1 oz) and feel to the Kirkland. However, it costs nearly twice as much per shirt when not on sale. Carhartt‘s K87 Workwear Pocket T-shirt offers comparable durability and a roomier fit, but at around $16.99 per tee, it‘s considerably pricier than Costco‘s. (Source)
Among the slew of startups offering premium direct-to-consumer T-shirts, American Giant ($38) and Everlane ($18) emphasize ethics and sustainability. But the former‘s Classic Crew is significantly lighter at 4.4 oz, while Everlane‘s thicker 6.2 oz option, the Premium Weight Crew, is out of stock due to production slowdowns. (Source)
Retailers like Gap and Old Navy offer multi-packs closer to Costco‘s price point, but reviews indicate lower quality. "I used to buy Old Navy T-shirts, but the Kirkland brand is what I buy now," one Costco customer writes on Reddit. "The material is much better quality and I like the fit a lot more. For the cost, they‘re unbeatable."(Source)
Industry trade group the American Apparel & Footwear Association points out that making "apples to apples" comparisons across brands can be difficult since companies don‘t always calculate spec measurements the same way and may source different types of cotton. (Source) But by buying direct and selling in bulk, Costco has greater control over materials and production, allowing it to keep its quality high and prices low.
The Future of Kirkland: More Than Just Generic Products
Apparel basics are just one piece of Kirkland‘s growing prominence in Costco‘s merchandise mix. While Costco will always be a destination for national brands, it‘s found that many members now actively seek out the Kirkland label as a mark of quality in itself.
"Building the Kirkland Signature brand…is a big part of our strategy," Costco‘s senior vice president of non-foods Jeff Lyons told CNN Business. "We‘re not just stamping Kirkland Signature on stuff. We‘re creating items and putting our twist to it." (Source)
Younger shoppers in particular have embraced Costco private labels, both for the value and the cachet associated with shopping there. On Instagram, the hashtag #kirklandsignaturefinds lets users share their latest Kirkland obsessions, from golf balls to olive oil. (Source)
It‘s all part of Costco‘s continuous quest to be a retail "treasure hunt" destination – a strategy that‘s allowed it to not just survive but thrive in the age of Amazon. "One of the things that gives Costco an advantage is the limited selection," Loyola University Maryland economics professor Marianne Sanzio told CNN. "It helps them run the stores more efficiently, and create this aura of a treasure hunt. You have to go frequently because you never know what you‘ll find."(Source)
As long as Costco keeps the gems coming, expect Kirkland Signature to continue taking over closets, pantries and garages around the globe. "Building upon the popularity of the Kirkland Signature label continues to be a strategic priority," the company wrote in its latest annual report.(Source)
So the next time you slip on a Kirkland tee, take pride in the fact that you‘re wearing a product that embodies the company‘s mission of delivering quality goods at the lowest possible prices. With the collective buying power of 105 million members behind it, Costco will no doubt keep innovating its private label to exceed the already sky-high expectations shoppers have for Kirkland products. The signature label is a key reason customers keep coming back to the concrete warehouse aisles year after year.
