This Kirkland Signature Hefeweizen is for you!

Already the leading seller of wine in the U.S., Costco (NASDAQ: COST) has applied to sell its own brand of beer. The beer, to be brewed by California crafter Gordon Biersch Brewing Company, will come in pale ale, hefeweizen, amber ale, and lager varieties.

With Trader Joe's-branded varieties of beer and wine already a staple at the parties I attend here in Portland, I wonder if this move will be a major market force in the premium beer market. (Gordon Biersch produces beer for Trader Joe's, already.) All of the big brewers have recently been making forays into premium brews as a reaction to the growing influence of smaller breweries like Sam Adams and Sierra Nevada, as well as the groundswell of regional microbreweries. Craft beer made up 3.6% of the U.S. market in 2006; but had grown by 31.5% over the 2003-2006 period, as opposed to low-single-digit growth in the beer market as a whole.

It is increasingly obvious to a substantial segment of the population that neither Bud nor Miller tastes great. The production of high volume, high quality Costco-branded beer will only magnify that realization and could be a serious challenge to the market dominance the large breweries have enjoyed for several decades. As for Costco? The company's obvious success in wine means it should find an easy time convincing its customers to become regular drinkers of Kirkland Ale and perhaps provide a good avenue for bottom line earnings growth.

RadioShack (NYSE: RSH), a company with a presence of through approximately 6,000 stores, closed at $21.45. RSH is expected to report EPS on 10/29. Sprint (NYSE: S) announced it expects a net loss of 337,000 post paid subscribers and lower annual revenue expectations. BMO Capital Markets say's "this is bad news for RSH as we estimate revenues related to S make up over half of wireless sales and over 15% of total revenues." RSH is expected to report EPS on 10/29. RSH November option implied volatility of 59 is above its 26-week average of 41 according to Track Data, suggesting larger price risks.

Costco (NASDAQ: COST) is expected to announce 4Q EPS of 83 cents on 10/10. Wachovia (NYSE: WB) said on 10/8 "COST's outlook for margin should be one of the key issues in focus on Wednesday's call." WB has an Outperform rating on COST. COST October option implied volatility of 33 is above its 26-week average of 24 according to Track Data, suggesting larger fluctuations.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and watch out for more Battle of the Brands posts.

A portfolio manager once said, "If a nuclear explosion hit my city and I had to pick one place to hole-up for a couple of years until all was calm, I would want to be at a Costco store. It has everything any human being could ever want or need." Well, I don't know if I could spend a couple of years in a Costco store, but no problem with a couple of hours!

Sam's Club, a division of Wal-Mart Stores Inc. (NYSE: WMT) versus Costco Wholesale Corp. (NASDAQ: COST): they have collectively changed the way people shop. The differences are profound between the two, yet conceptually they are very similar. Both "warehouse" concepts sell in bulk fashion. If you're looking for a small jar of Grey Poupon mustard, forget either of these two warehouse stores. But, if you want two side-by-side 16-ounce jars of Grey Poupon, enough to satisfy a football team, then you have come to the right place.

As similar as these two are, the differences do exist. Costco offers tremendous prices to its customers (club members) and quality. Costco has figured out the consumer will come in with a set list of items to be purchased, only to be enticed to expand that list as they walk the store. Strategically placed "special" items, or Costco employees serving out free samples of delicious food and drink items not normally found on the customer's list. It's brilliant marketing: on-site demonstrations and/or sampling of the product. "An impulse purchase" is the expression I have used many, many times as I've explained to my wife why I bought this or that.