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Costco sees stronger sales growth in June

Wholesale club chain’s online sales jump by more than 85%

Russell Redman

July 9, 2020

3 Min Read
Costco_warehouse_club-exterior.jpg
“The COVID-19 pandemic continues to impact our sales and comp traffic," said David Sherwood, assistant vice president of finance and investor relations at Costco.Costco

Net and comparable sales growth topped 11% at Costco Wholesale in June, fueled in part by the ongoing coronavirus crisis.

For the five weeks ended July 5, net sales came in at $16.18 billion, up 11.1% from $14.57 billion a year earlier, Costco reported after the market close yesterday.

The Issaquah, Wash.-based warehouse club said year-to-date sales, covering 44 weeks, have climbed 8.1% to $136.37 billion from $126.13 billion in the prior-year period.

Costco’s overall comp sales for June rose 11.5% year over year, reflecting gains of 11% in the United States, 8.4% in Canada and 18% internationally. Excluding the impact of changes in fuel pricing and foreign exchange, total comp sales were up 14.4%, with increases of 13.6% in the U.S., 12.2% in Canada and 22.1% internationally.

E-commerce sales soared 85.8% in June versus a year ago and were up 86.7% excluding the effect of foreign exchange.

In May, Costco reported growth of 7.5% in net sales and 5.4% in comp sales (9.7% excluding fuel and forex). U.S. comps rose 5.5% (9.2% excluding fuel and forex). Companywide, May e-commerce sales surged 106.2% (108.1% excluding forex).

“The COVID-19 pandemic continues to impact our sales and comp traffic. Merchandise sales were very strong in June, while ancillary businesses continued underperform relative to the core [categories], primarily due to softness in gas, food court and photo,” David Sherwood, assistant vice president of finance and investor relations at Costco, said in a conference call late Wednesday.

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

“Gas traffic improved from a month ago, but comp gallons remain negative. Food court service continues to be limited to carryout only and a reduced menu,” he explained. “Sales in our optical and hearing aid departments improved significantly from May, as we were operational and continue to make progress in building back service levels in those departments. Our travel business remains soft, as not much has changed in that industry from a month ago.”

On a comparable basis, club traffic in June dipped 1.6% worldwide but edged up 0.4% in the U.S. — “the first positive traffic results since March,” Sherwood noted. The average transaction rose 13.3%, including negative impacts from foreign exchange and gasoline deflation. In the U.S., regions seeing the strongest results were southeastern Texas and the Northeast.

Merchandise category highlights in June, excluding forex, were led by food and sundries, which posted gains in the “positive high teens,” according to Sherwood.

“Departments with the strongest results were frozen food, liquor and deli. Fresh foods were up mid-20s, and better-performing departments included meat and produce,” he said in the call. “Hardlines were positive low 20s, and better-performing departments included major appliances, which include consumer electronics, and hardware and health and beauty. Softlines were positive mid-teens. Home furnishings were strong in the month, as were small appliances. Apparel, particularly women’s, performed well, which was a nice improvement to the recent trend. Ancillary businesses were down high teens. This was primarily as a result of lower gasoline, photo and food court sales. Optical and hearing aids were down year over year but improved relative to last month as we were operational in these businesses.”

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

For the 44-week period, overall comp sales advanced 6.7% (8.1% excluding fuel and forex) and gained 7.2% in the U.S. (8.1% excluding fuel and forex). E-commerce sales jumped 42.8% (43.4% excluding forex) during the period.

Costco operates 788 wholesale clubs, including 548 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 and two in Spain, as well as one apiece in Iceland, France and China. The retailer has e-commerce websites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.

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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