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Costco’s sales jump nearly 17% in July

E-commerce sales growth downshifts into single digits

Russell Redman

August 5, 2021

3 Min Read
Costco_club_exterior-evening.jpg
In July, Costco's e-commerce sales rose 7.4% on a comparable basis, following gains of 20.8% in June 2021 and 75.3% in July 2020.Costco

Costco Wholesale saw e-commerce sales growth tail off in July despite double-digit net and comparable sales gains for the month.

For the four weeks ended Aug. 1, net sales climbed 16.6% to $15.21 billion from $13.04 billion a year earlier, Costco reported Wednesday after the market close. In the 48-week year-to-date period, the warehouse club retailer tallied net sales of $176.3 billion, up 17.8% from $149.66 billion a year ago.

Comparable-club sales during the July selling period rose 13.8% overall and were up 8% excluding the impact of changes in fuel prices and foreign exchange (FX) rates. By business unit, comp sales advanced 13.1% in the United States (8.5% excluding fuel and FX), 16.5% in Canada (5.5% excluding fuel and FX) and 14.4% internationally (7.8% excluding fuel and FX). 

E-commerce sales, however, fell to single-digit growth from hefty double-digit increases in the previous month and year-ago period. In July, digital sales gained 7.4% on a comparable basis and were up 5.7% excluding FX, Issaquah, Wash.-based Costco said. That compares with year-over-year growth of 20.8% in June 2021 (18% excluding FX) and 75.3% in July 2020 (76.1% excluding FX).

The online result reflects an overall industry slowdown in e-commerce sales growth as more customers return to stores and retailers cycle last year’s big sales gains driven by the COVID-19 pandemic. For the 48 weeks, Costco said e-commerce sales surged 48.9% (47% excluding FX).

Related:Costco pilots grocery delivery with Uber

The company’s reported online sales don’t include sales through third-party providers such as Instacart.

“Our comp traffic, or frequency, for July was up 6.9% worldwide and up 5.8% in the U.S.,” David Sherwood, assistant vice president of finance and investor relations at Costco, said in a conference call late yesterday. “Worldwide, the average transaction for July was up 6.4%, which included positive impacts from gasoline inflation and FX,” he added.

Fuel price inflation lifted overall comp sales by approximately 3.9% for the month, according to Sherwood. “The average selling price was 40% higher year over year at $3.35 per gallon this year compared to $2.40 last year,” he said. “Comp gasoline volume was up significantly relative to last year and was also positive versus 2019.”

U.S. regions and markets seeing the strongest sales results for Costco in July were Texas, the Southeast and Los Angeles, Sherwood reported. Internationally, Mexico, Korea and Taiwan had in the top performances.

Food and groceries were among the merchandise highlights in year-over-year comp sales growth (excluding FX) for the month.

Related:Deep Dive: Why Costco, Market Basket and Wegmans will roar back post-COVID

“Food and sundries were positive low single digits. Candy and frozen foods were the strongest departments,” said Sherwood. “Fresh foods were up mid-single digits, and better-performing departments included service deli and bakery. Nonfoods were positive low double digits. Better-performing departments included domestics, sporting goods, jewelry and hardware. Ancillary businesses were up mid-40s. Gas, food court and optical were all significant drivers.”

Costco ended the July retail period with 813 warehouse clubs overall, compared with 790 a year earlier. By market, the retailer operates 562 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 apiece in Iceland, France and China. Costco runs e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.

“July core U.S. comp of 8.5% was very slightly below our 8.9% Q4 estimate, while Canada and International were both better,” Jefferies analyst Stephanie Wissink wrote in a research note late Wednesday. “However, the two-year U.S. comp accelerated 280 basis points month over month to 24.2%. A continued increase in COVID-19 cases could benefit near-term comps if food-at-home and other at-home spend rise as a result.”

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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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