Costco grows sales even without curbside pickup

On Costco’s nearly 90-minute earnings call Thursday evening, management was asked why it doesn’t offer online ordering for in-store or curbside pickup of groceries and other general-merchandise items—a key pitch for other retailers from Walmart WMT +0.4% and Target TGT +1.5% to Kroger KR +0.3% and Amazon’s AMZN +2.5% Whole Foods WFM 0.0%. 

“It’s not on our priority list,” said Richard Galanti, the finance chief at Costco, which only has in-store pickups for some electronics and jewelry items. “Our sales are stronger than ever. We are good at pivoting (if the need ever arises).” 

Months after the coronavirus pandemic led consumers to line upoutside its warehouses to stock up on groceries and other items, demand at the largest membership warehouse club remains well above the industry average. In the quarter that ended August 30, comparable sales, excluding the impact of gasoline sales and foreign currency translations, jumped nearly 14% in the U.S., its largest market with 552 warehouse clubs. 

More consumers visited the stores in the U.S., a feat that would be the envy of many of its industry rivals, and they spent more per transaction. 

“People are feeling safe coming in,” Galanti said, adding that customer traffic picked up “dramatically” in July and August. 

Also noteworthy was that customers were there not only to buy fresh foods and other grocery items but also to purchase non-essential items such as outdoor patio furniture and clothing, a trend Costco expects to last. “We are retaining more of their dollars even when they go back to dining and other things,” Galanti said. 

Source: Forbes