Costco had a very merry holiday season, with net sales up to $14.94 billion for the five-week period that ended Dec. 31. — a 14.3 percent increase from the $13.07 billion Costco was reporting the same time last year. Some of that success can be attributed to a little more time: December technically picked up an additional shopping day due to the New Year’s Day calendar shift. The consensus is that extra time gave sales a 2.5 percent boost.
In the first 17 weeks of FY 2018 — which also came to an end on New Year’s Eve — Costco saw net sales up 11.9 percent over the same time in 2016, increasing to $46.06 billion. The extra shopping day did not have much effect on this result.
Same-store sales were up 8.8 percent, with a 9.1 percent increase in the U.S. Same-store sales were up 6.5 percent in the first 17 weeks of the year; eCommerce notched a 32.2 percent gain in December and a 30.9 percent increase during the 17-week timespan.
“To put the company’s performance into some context, December represents the fifth consecutive month of double-digit total sales growth — albeit with very little unit expansion — a testament to the model, which is generating strong comps from both new and mature units,” said Gordon Haskett analyst Chuck Grom in a Retail Dive interview.
Despite the reported result, however, Costco took a late-in-the-week trading dip, as investors were concerned that Costco’s recent show of strength may not be a trend with momentum.
The eCommerce boost is notable, because until recently, Costco was not known for prioritizing the digital commerce experience. Their position is starting to change, however: The warehouse shopping giant has partnered with Instacart, upgraded its website and made a more concerted effort to expand its efforts into the digital arena.
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“Their customers are extraordinarily loyal and trust them implicitly,” said Retail Analyst Nick Egelanian, president of retail development consultants SiteWorks International. “They have many internet-only exclusives, but, like in their stores, they are specific and deal-oriented.”
Costco doesn’t boast a massive SKU (stock keeping unit) count: 2,500 SKUs per store is their average.
“In the end, I just think they are a STORE — and a really good and successful one at that — that relies on the in-store experience of the treasure hunt, and the internet just is not an integral part of that formula,” Egelanian concluded.
