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Costco’s sales climb in May as coronavirus impact continues

Grocery sales remain robust, services start to reopen

Russell Redman

June 4, 2020

3 Min Read
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During the month of May, Costco e-commerce sales soared 106.2% on a comparable basis.Costco

Costco Wholesale posted strong sales gains in May as the warehouse club saw ongoing growth in purchases of food, groceries and essentials and began reopening some services closed due to the coronavirus pandemic.

For the four weeks ended May 31, net sales totaled $12.55 billion, up 7.5% from $11.67 billion a year earlier, Costco said yesterday after the market close.

Overall comparable sales rose 5.4% year over year in May and were up 9.7% excluding the impact of changes in fuel prices and foreign exchange rates, the Issaquah, Wash.-based retailer reported. U.S. comps grew 5.5% (9.2% excluding fuel and forex), while Canada had a 0.9% decrease ( 4.9% excluding fuel and forex). International comp sales advanced 12% and were up 17.9% backing out fuel and foreign exchange.

Companywide, e-commerce sales soared 106.2% on a comparable basis.

“The COVID-19 pandemic impacted our sales and comp traffic in our warehouses for the month of May. Nonfoods rebounded in May compared to recent months, and the strength in foods and sundries and fresh continued,” David Sherwood, assistant vice president of finance and investor relations at Costco, said in a conference call late Wednesday. “We started May with most of our optical hearing aid and photo departments closed but added back service progressively over the month. We finished with approximately 90% back in operation by month-end. But even after opening, sales volumes are still being negatively impacted by COVID-19. Food court service continues to be limited to carryout only. And, of course, travel was significantly down year over year.”

Related:Whole Foods, Costco, Trader Joe’s lead in retailer COVID-19 safety

Costco’s customer traffic in May declined 4.8% year over year in the United States and 7.9% worldwide. The average transaction, however, grew 14.4% overall, reflecting negative impacts from foreign exchange and fuel price deflation.

In the U.S., southeastern Texas and the Northeast were the regions seeing the strongest comp-sales results during May, according to Sherwood. Generally, consumables categories experienced robust growth, though hardline also turned in a strong performance, he explained.

“Food and sundries were positive. High-teens departments with the strongest results were frozen food, liquor and foods. Fresh foods were up low 20s. Better-performing departments included meat and produce,” Sherwood said in the call. “Hardlines were positive, low 20s, and better-performing departments included major appliances, which includes consumer electronics, sporting goods and hardware. Softlines were positive, low single digits. Sales were soft in luggage, jewelry and apparel but improved versus April. Ancillary businesses were down high 30s. This was primarily as a result of lower gasoline sales and partial closings [of service businesses].”

Related:Costco adjusts to shifting purchase behaviors as Q3 sales rise

Gasoline price deflation negatively impacted Costco’s total comp sales in May by just over 3%, Sherwood reported, adding that the average selling price was $2.06 per gallon versus $3.13 a year ago.

Currently, Costco has 787 wholesale clubs overall, including 547 in the U.S. and Puerto Rico, 100 in Canada, 39 in Mexico, 29 in the United Kingdom, 26 in Japan, 16 in Korea, 13 in Taiwan, 12 in Australia, two in Spain, and one each in Iceland, France, and China. The retailer operates e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.

For our most up-to-date coverage, visit the coronavirus homepage.

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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