On a recent visit to Motley Fool HQ, Costco (Nasdaq: COST) CEO Jim Sinegal remarked, "We sell 30-pound containers of mayonnaise. Isn't that great? We'd sell a bigger one, but they don't make it."

The retailer of pianos, coffins, and, yes, 30-pound jars of mayonnaise has managed to continue growing during the recession and impressively avoid layoffs altogether.

How does Costco stay ahead of competitors such as BJ's Wholesale Club (NYSE: BJ) and even Target (NYSE: TGT)? Sinegal chatted with us about staying ahead of competitors, wading the recession, pricing, and Costco's metrics for measuring success. Here are three quick hits from the conversation we had with him. (Note: You can listen to the entire audio interview at www.motleyfoolconversations.com.)

Barriers to growth in a recession
The lackluster real estate market has been an impediment for Costco, making it difficult for the company to open stores in new locations. "I thought there would be plenty of real estate opportunities to go out and grow the business, but they've been tough to come by because in many instances nobody knows who owns the land anymore." Sinegal told us Costco tried to broker a deal for a major shopping center in Virginia, but both the developer and the bank went broke: "So now that deal will probably die."

Sinegal also said that Costco has also struggled with deflation. As the dollar has weakened, it has pushed international business results down 8% in U.S. dollars for the first 11 months of the fiscal year. Results were up 9% in local currency terms.

Likewise, gasoline has been a big drain on Costco. Sales of gasoline have skidded by nearly $2 billion since last year. Though, the point of comparison is more pronounced, as the price of gas was around $4 per gallon last year. Additionally, as fuel prices have fallen, Costco has lowered prices. "We did our best to try to lower prices for the consumers, which is why good companies not only find a way to thrive but to build market share during tough times."

Sinegal on pricing
Sinegal observed that as commodity prices have come down so have prices.  He noted that the consumer has become a lot smarter about what she or he buys:

You're seeing that the private label is becoming much more important across the country. [It's] not just in Costco, where our Kirkland Signature is very popular, but in Kroger (NYSE: KR) and Wal-Mart (NYSE: WMT) and in every retailer across the country because oftentimes people realize you're going to get the same product in a private label package that you would get from a brand product.

For example, Costco sells Kirkland Signature detergent for $13.99 and Procter & Gamble's (NYSE: PG) Tide Liquid at $20.99, and there's a good chance that consumers will purchase the less-expensive product. Continued...