Membership-only warehouse club Costco rounded out 2016 with a bang.
Sales for the 40-year-old, Washington State-headquartered company in the last 18 weeks boosted 2 percent overall, with stores in the U.S. increasing 1 percent, those in Canada up 5 percent and 1 percent up for all other regions of the world that Costco has stores in. And in speaking just about December numbers, total sales jumped 3 percent both overall and in the U.S. and more in Canada (7 percent).
These numbers are significant considering that November was not as positive. Experts blame the election for those rusty numbers but attribute the gains to the holidays immediately after Thanksgiving.
Experts are also looking at younger generations for the reason for the uptick. Both millennials and Gen Z shoppers, no longer tagging along with mom, have been popping into stores to get their own membership cards. As a result, according to Costco executives, the average age of the card-carrying member has dropped by at least two years.
Costco executives said the reason the younger generations are coming into the warehouses is not just because of the prices but rather the options available for shoppers: organic foods, customer service, quality of goods and the options. The latter element is also significant because Costco keeps fewer than 4,000 stock keeping units (SKU), meaning that there is only one product per type of item besides its private label (typically, Kirkland). For example, there is only one type of grated cheese or one brand of toothpaste.
The company also has an eCommerce platform for shoppers in the U.S., Canada, the U.K., Mexico, Korea and Taiwan.
Back in December, the company said sales of TVs were up 17 percent in units but only up 2 percent in dollar terms through the November shopping period, and CEO Richard Galanti said of the earnings period: “We are going to invest in loyalty and growth while it is raining on everybody as it relates to higher levels of deflation.”
Foot traffic was up a bit more than 2 percent in the period as well.