The Globe and Mail has an article about how Costco breaks the rules of retailing
... and profits from it. It offers little customer service and few product choices; it piles products high on pallets and doesn't bother to mine the customer data it collects.
Costco has warehouse-style stores, an unpredictable stock of often unique, upscale items, low prices and membership fees for the privilege of shopping at the stores.
There are profits to be made with a wide variety of retail business strategies. Success is in the execution. Small retailers will do better to learn from how well Costco treats its employees than from its low price strategy. Little guys will find it hard to survive in the discount, commodity product world.