I've not had experience of anything like the scale of Costco before or in food, but what I know of retail is that margins are typically double the cost price. Where would such a low figure come from?

Not sure where the double the cost price coming from. Different Segment of Retail have different price structure. Double would be the norm for Electronics or anything that are not commodity.

Margin tends to be around 30-40% depending on products. Once you deduct everything else they quickly come down to net >10% margin.

Edit: phrased poorly. The profit margin is typically the same as the cost price at the till - this doesn't take into account deducting the cost of running the business, etc.