Costco Maintains Momentum Despite Slower Food Sales

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A year on from the start of the pandemic, Costco has continued its strong run despite demand easing in some of its food categories.

Over the 5 weeks to 4 April, the warehouse club retailer saw its total sales climb 17.6% to $18.21bn with comparable sales (excl. the impact of fuel and currency fluctuations) up 11.1%.

Comparable sales increased by 11.3% in its US business and were up 13% in Canada. However, sales in its international division slowed to 7.7%. E-commerce sales rose 54.5% as Costco continued to benefit from the shift towards online shopping during the crisis.

The retailer has proved popular during the pandemic as consumers bulk bought groceries and favoured shopping in spacious warehouses over more crowded supermarket stores.

Despite the Covid crisis and restrictions starting to ease in some countries, Costco revealed that shopper traffic had increased last month. However, as the market annualises against a record-breaking period in early 2020 when consumers began stockpiling groceries, Costco’s figures were impacted.

David Sherwood, assistant VP of finance and investor relations at Costco, said: “Food and sundries were negative high single digits. Fresh foods were up mid-single digits; better-performing departments included service deli and bakery. Non-foods were positive in the mid-50s; better-performing departments included sporting goods, garden, toys and seasonal, jewellery, home furnishings and domestics. As their businesses were up mid-30s, gasoline, hearing aids and optical were the primary drivers.”

Costco currently operates 807 warehouses, including 559 in the US and Puerto Rico, 104 in Canada, 39 in Mexico, 29 in the UK, 28 in Japan, 16 in Korea, 14 in Taiwan, 12 in Australia, three in Spain, and one each in Iceland, France, and China.

NAM Implications:
  • Key is how your sales compared…
  • …by category and geography.

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