Despite further deceleration in e-commerce sales growth, Costco Wholesale upheld double-digit net and comparable sales increases for August.
In the four weeks ended Aug. 29, net sales rose 16.2% to $15.75 billion from $13.56 billion a year earlier, Costco reported yesterday after the market close.
Comparable-club sales for the August selling period gained 14.2% overall and were up 9.1% excluding the impact of changes in fuel prices and foreign exchange (FX) rates. By business unit, comp sales rose 14.7% in the United States (10.1% excluding fuel and FX), 13.4% in Canada (5.2% excluding fuel and FX) and 12.2% internationally (7.3% excluding fuel and FX).
August e-commerce sales inched up 2.8% on a comparable basis and were up 1.8% excluding FX. That marked the second consecutive month of single-digit online sales growth, reflecting the cycling of last year’s large pandemic-driven gains. In July, digital sales rose 7.4% on a comparable basis (5.7% excluding FX) after a gain of 20.8% in June 2021 (18% excluding FX). And in August 2020, Costco tallied 101.9% e-commerce comp-sales growth (101.6% excluding FX).
Customer traffic for August 2021 grew 7.1% worldwide and 7.5% in the U.S., according to David Sherwood, assistant vice president of finance and investor relations at Costco.
“The average transaction for August was up 6.6%, which included the positive impacts from gasoline inflation and FX,” Sherwood said in a phone report late Wednesday.
Fuel price inflation lifted total reported comp sales by about 3.9%. “The average selling price was 41% higher year over year at $3.39 per gallon this year compared to $2.41 last year,” he said. “Comp gas volume was up significantly relative to last year and was also positive versus 2019 worldwide.”
Relative to the U.S. dollar, foreign exchange rate fluctuations impacted Costco’s August comp sales by 1.2% overall, including 5.4% in Canada and 3.6% internationally.
Among comp sales (excluding FX) in core merchandise categories, Sherwood said, “food and sundries were positive mid-to-high single digits; sundries and candy were the strongest departments. Fresh foods were up mid-to-high single digits. Better-performing departments included service deli and bakery. Nonfoods were positive mid-to-high single digits, and better performing departments included housewares and sporting goods, jewelry and domestics. Ancillary businesses were up mid-40s. Gas, food court and pharmacy were all significant drivers.”
U.S. regions and markets turning in the strongest sales results for Costco in August were Texas, the Southeast and Los Angeles, Sherwood reported. Internationally, Mexico, Korea and Taiwan posted the top performances.
Costco’s August sales report came at the Issaquah, Wash.-based warehouse club chain’s 2021 fiscal year-end. For the 16-week fourth quarter, net sales were $61.4 billion, up 17.4% from $52.3 billion in the prior-year period. Fiscal 2021 sales, covering 52 weeks, climbed 17.7% to $192.1 billion from $163.2 billion in 2020.
Comp sales increased 15.5% overall in the fourth quarter (14.9% in the U.S.) and were up 16% for all of fiscal 2021 (14.8% in the U.S.), Costco said. On the e-commerce side, fourth-quarter sales advanced 11.2% year over year, contributing to 44.4% growth for the full year.
Costco finished the August retail period with 815 warehouse clubs overall, compared with 795 a year earlier. By market, the retailer operates 564 clubs in the U.S. and Puerto Rico, 105 in Canada, 39 in Mexico, 30 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 12 in Australia, three in Spain and one each in Iceland, France and China. Costco also runs e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.