While Costco Wholesale Corp. continues to test home delivery, company execs at the Issaquah, Wash.-based wholesale shopping club contend strong bargains will keep shopping warehouses busy.
“It’s merchandising, it’s quality and it’s quantity relative to price. It’s the extreme value,” Richard Galanti, Costco executive vice president and chief financial officer told investors on May 29, said in commenting about the reason customers come to Costco stores. His comments came after an analysts noted that the CEO of one of his biggest competitors said “if consumers just don’t want stores, maybe we won’t have stores.”
“If you like our rotisserie chicken or our whole-meal replacement items or any of those great fresh food items or organic produce, it’s a reason for you to come in,” Galanti said. “And if you walk by the sweaters and the batteries and the patio furniture and the active wear, you are going to buy some more stuff.”
Moreover, Galanti said, delivering small quantities of stuff to people’s homes is not free; ultimately somebody has got to pay for it. “And if we are going to lose sales over time to some of that, we will figure out how to not lose as much and how to drive sales in other ways,” he said. “I think we’ve been pretty good at that.”
In April, Costco solicited the help of design and development firm Reply and SAP’s e-commerce data management subsidiary hybris to optimize its Mexico wholesale website.
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