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Correspondence Letter

Writer’s Direct Number:

(425) 313-8203

Fax:

(425) 313-6593

 February 8, 2010

BY UPS OVERNIGHT MAIL AND FACSIMILE

 H.
Christopher Owings

 Assistant Director

 United States Securities and Exchange Commission

 Mail Stop 3561

 Washington, D.C. 20549

Re:
Costco Wholesale Corp. — Form 10-K for the Fiscal Year Ended August 30, 2009, filed October 16, 2009, and Definitive Proxy Statement on Schedule 14A,
filed December 18, 2009 — File No. 000-20355

 Dear Mr. Owings:

 In response to your letter of January 21, please see the discussion below, which corresponds to the numbered paragraphs in your letter.

 Form 10-K for the Fiscal Year Ended August 30, 2009

 Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 20

1.
 Please expand this section to discuss known material trends and uncertainties that will have, or are reasonably likely to have, a material
impact on your revenues or income or result in your liquidity decreasing or increasing in any material way. We note, for example, on page 27 you state your net income decreased $0.42 per diluted share in 2009 versus 2008. You attribute $0.27 of this
decrease to issues involving foreign currencies ($0.19), litigation ($0.05) and insurance ($0.03), but do not discuss the remaining $0.15 per diluted share decrease. Please provide additional analysis concerning the quality and variability

 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 February 8, 2010

of your earnings and cash flows so that investors can ascertain the likelihood or the extent past performance is indicative of future performance. Please discuss whether you expect levels to
remain at this level or to increase or decrease. Also, you should consider discussing the impact of any changes on your earnings. Further, please discuss in reasonable detail: economic or industry-wide factors relevant to your company, material
opportunities, challenges, and risk in the short and long term and actions you are taking to address them. Refer to Item 303 of Regulation S-K and SEC Release No. 33-8350.

 Response:

 We
acknowledge the importance of providing meaningful Item 7 MD&A Overview disclosures in our annual and quarterly reports, including a discussion of material trends and uncertainties as well as economic or industry-wide factors relevant to
our Company, and material opportunities, challenges and risks and actions we are taking to address them. In our future Form 10-Q and 10-K filings, we will expand our disclosure to further address these items. For example, subject to potential
intervening changes in the business, we will include disclosure in substantially the following form in the MD&A Overview section of our next Form 10-Q filing:

 Proposed disclosure (new text underlined):

 We believe that the most
important driver of increasing profitability is sales growth, particularly comparable sales growth. Comparable sales growth is achieved through a combination of increasing the frequency with which our members shop and the amounts they spend on each
visit. Sales comparisons can also be particularly influenced by two factors that are beyond our control, including fluctuations in currency exchange rates (with respect to the consolidation of the results of our international operations) and changes
in the cost of gasoline and associated competitive conditions (primarily impacting domestic operations). The higher our comparable sales not associated with currency fluctuations the more we can leverage certain of our selling, general and

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 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 February 8, 2010

administrative expenses, reducing them as a percentage of sales and enhancing profitability. Generating comparable sales growth is foremost a question of making available to our members the right
merchandise at the right prices, a skill that we believe the Company has repeatedly demonstrated over the long term. Another substantial factor in sales growth is the health of the economies in which we do business, especially the United States.
Adverse economic conditions negatively impacted spending by our customers during 2009, and we expect that negative impact to continue in 2010. Sales growth and our gross margin are also impacted by our competition, which is vigorous and widespread,
including other warehouse clubs, discount, department, drug, variety and specialty stores, and supermarkets, as well as internet retailers. While we cannot control or reliably predict general economic health or changes in competition, we believe
that we have been successful historically in adapting our business to these changes, such as through adjustments to our pricing and to our merchandise mix, including increasing the penetration of our private label items. Our philosophy is not to
focus in the short term on maximizing prices that our members can be charged but to maintain what we believe is a perception among our members of our “pricing authority” – consistently providing the most competitive values. This may
cause us, for example, at certain times to absorb increases in merchandise costs rather than immediately passing them along to our members.

 Our financial performance also depends heavily on our ability to control costs. While we believe that we have achieved successes in this area historically, some significant costs are partially outside
our control, most particularly health care expenses. With respect to expenses relating to the compensation of our employees, our philosophy is not to seek to minimize the wages and benefits that they earn. Rather, we believe that achieving our
longer-term objectives of reducing turnover and enhancing employee satisfaction requires maintaining compensation levels that are better than the industry average for much of

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 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 February 8, 2010

our workforce. This may cause us, for example, to absorb costs that other employers might seek to pass through to their workforces. Because our business is operated on very low margins, modest
changes in various items in the income statement, particularly gross margin and selling, general and administrative expenses, can have substantial impacts on net income.

 We also achieve growth by opening new warehouses and relocating existing warehouses to larger facilities. As our warehouse base grows and
available and desirable potential sites become more difficult to secure, square footage growth becomes a comparatively less substantial component of growth, but the negative aspects of such growth (including lower initial operating profitability
relative to existing warehouses and cannibalization of sales at existing warehouse when openings occur in existing markets) are ameliorated. Our rate of square footage growth is higher in foreign markets, due to the smaller base in those markets,
and we expect that to continue.

 With respect to our net income discussion in Part II, Item 7, page 27 of our Form
10-K, our discussion in this section itself focused on the more significant unusual items that accounted for the decrease in net income compared to the prior year. The remaining $0.15 per diluted share decrease is the result of a combination of
other factors, such as sales, membership fees, gross margin, and selling, general and administrative expenses, that are discussed in detail in the preceding sections of the MD&A disclosure. In future filings, we will expand our net income
disclosure to clarify these points and, when applicable, provide additional analysis to assist investors in ascertaining the likelihood or extent past performance is indicative of future performance.

 Using the net income disclosure from the Form 10-K (p. 27) as an example, we would revise the disclosure as follows (new text
underlined):

 4

 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 February 8, 2010

 Net Income

 2009 vs. 2008

 Net
income for 2009 decreased to $1,086, or $2.47 per diluted share, from $1,283, or $2.89 per diluted share, during 2008, representing a 15% decrease in diluted net income per share. As previously discussed, foreign currencies, particularly in Canada,
the United Kingdom and Korea, weakened against the U.S. dollar, which negatively impacted net income for 2009 by approximately $83 after-tax, or $0.19 per diluted share. Additionally, net income for 2009 was negatively impacted by a $34 pre-tax
charge, or approximately $0.05 per diluted share, related to a proposed litigation settlement concerning our membership renewal policy, as well as a $23 pre-tax charge, or approximately $0.03 per diluted share, for an adjustment to the net
realizable value of the cash surrender value of employee life insurance contracts. Other factors, discussed in detail above (including sales, membership fees, gross margin, and selling, general and administrative expenses), contributed to the
decrease in net income, most particularly the decline in sales. A substantial decline in share repurchase activity also impacted the decline in earnings per share. Net income for 2009 was positively impacted by a $32 pre-tax, or $0.05 per
diluted share, benefit due to the reversal of the LIFO reserve established in 2008.

 Notes to Consolidated Financial Statements, page 50

 Note 1 – Summary of Significant Accounting Policies

 Property and Equipment, page 52

2.
 We note the estimated useful lives of your buildings ranges from 5-50 years. In this regard, explain to us the reason for such a wide range. In
addition, clarify the nature of the building structures that fall within the low end of the

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 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 February 8, 2010

range and explain to us why their estimated useful lives are reasonable.

 Response:

 In general, we assign estimated useful lives to our building assets
using a componentization method, rather than assigning a single life to the building as a whole. Each building has approximately 25 different asset categories, such as flooring, restrooms, roofing, masonry, external metal building structure, HVAC
systems and parking lot assets. Each category is assigned a useful life based on the shorter of the estimated useful life of that category or the remaining lease term. Those categories assigned a useful life of five years generally include carpeting
and flooring (other than the concrete slab), which are replaced more frequently and which generally represent a very small percentage of the total value of the building and improvements.

 Proposed disclosure: (new text underlined)

 Property and Equipment

 Property and equipment are stated at cost. In general,
new building additions are separated into components, each with its own estimated useful life. Depreciation and amortization expenses are computed using the straight-line method. Interest costs incurred on property during the construction period
are capitalized. Estimated useful lives by major asset category are as follows:

 Years

 Buildings

5 – 50

 Equipment and fixtures

3 – 10

 Leasehold improvements

Shorter of useful life or lease term

 Land improvements

15

 Software acquisition and development

3 – 6

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 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 February 8, 2010

 Revenue Recognition, page 56

3.
We note you offer free technical support services and extended warranties on electronic products. In this regard, tell us and disclose how you account for these
separate deliverables. Refer to EITF 00-21 and FASB ASC 605-25. Also, advise us whether you offer similar extended warranties for other products such as tires and batteries, etc. If so, tell us and disclose your accounting policy for each of these
programs. In your response, tell us and disclose whether you are the primary obligor and how you recognize the revenues and the related costs. To the extent that you are the primary obligor and that these programs are material to your financial
statements, we believe you should disclose how you estimate the warranty obligations including the key assumptions behind the estimates in your critical accounting policies section MD&A. Refer to SEC Release No. 33-8350.

 Response:

 The free technical support services are primarily phone assistance related to product set-up and use, and are performed by a third-party service provider. We do not view this service as a separate unit of
accounting under EITF 00-21 (FASB ASC 605-25), primarily because the amount of separate revenue that one might theoretically separate for this item is insignificant; total costs were approximately $20 million in fiscal 2009. These costs are expensed
as incurred and included in merchandise costs in our Consolidated Statements of Income, which totaled over $62 billion in fiscal 2009.

 Unlike many retailers, the Company does not separately sell “extended warranties” on merchandise it carries. Costco provides a twelve-month warranty following the typical manufacturer’s twelve-month warranty. The costs
related to Costco’s warranty are accrued at the time of sale as a warranty obligation under FAS 5: Accounting for Contingencies (FASB ASC 450-20 and 460-10). We view these costs as an obligation incurred in connection with the sale of certain
electronics items that may require further performance. The warranty repair work is performed by

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 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 February 8, 2010

third-party service providers. The accrual is based on our historical experience related to the number of repair incidents and the average repair cost. The estimated warranty cost has averaged
approximately $7 million annually over the last two years. The warranty accrual at the end of fiscal 2009 was approximately $11 million. The above items were not disclosed in our consolidated financial statements due to their immateriality.

 We do not offer a similar warranty program for the vast majority of items that we sell. Based upon the Company’s policy
of member satisfaction, however, we generally accept returns of merchandise. We have a 90-day returns policy on certain electronics items. Our battery and tire warranties relate to the age of the item upon a return. Batteries are generally sold with
a one to three-year life, meaning that any battery returned within the related time frame (warranty period) will receive a full refund, while batteries returned after the warranty period will receive a pro-rated return value in relation to its
stated life. Tires are sold with a road hazard warranty, which will refund the member a pro-rated value based on tread usage and/or months used, assuming the member meets the conditions of the warranty. These adjustments concerning batteries and
tires are included in the sales returns reserve taken at the time of sale.

4.
We note your policy of recognizing membership fees ratably over the one-year membership period. However, we also noted from your company website that it is your
policy to refund membership fees in full at any time. In this regard, expand your disclosures to clarify your cancellation and refund policy for membership fees. In addition, explain to us why it is appropriate under GAAP to recognize membership
fees ratably over the membership period given the full refund policy. Refer to SAB Topic 13.A.4.

 Response:

 It is our policy to refund membership fees in full upon request. We believe it is appropriate under SAB Topic 13.A.4 to
recognize membership fees ratably over the

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 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 February 8, 2010

membership period, as the criteria specified under that topic are all met:

•

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