Costco sees strong growth in June

Date : 10 July 2020

Keshia Beadle

Senior Retail Analyst

Costco's sales continue to improve, with net sales in June up 11.1% to $16.18bn. This reflects the shift towards one big shop and Costco's strength in this area.

Strong growth across its markets

The performance in June builds on the progress made in May, when net sales increased 7.5% to $12.6bn. During the month of June, sales were up in all regions, with the US growing by 11%, Canada up 8.4% and growth of 18% internationally. Excluding the impact of currency movements and fuel, comparable sales were up 14.4%, with growth of 13.6% in the US, 12.2% in Canada and 22.1% internationally.

Source: IGD Research

Ecommerce driving performance

Ecommerce sales were up 85.8% in June and this continues to be an area of strength for Costco. The coronavirus pandemic has caused accelerated growth in the online channel and Costco has been able to respond accordingly, providing shoppers with the services they require. In-store, traffic was down 1.6% across the business, but in the US it increased by 0.4%, the first positive traffic growth since March. Transaction size was up 13.3%, which demonstrates the continued trend of consumers shifting to fewer but larger trips.

Pandemic continues to impact category performance

Whilst the food business and core categories continue to perform well, the coronavirus pandemic is affecting sales of fuel, as well as areas such as travel, the food court and photos. Departments such as optical and hearing are now operational and Costco is working to build back service levels. Food and sundries growth was in the high teens and the departments with the strongest growth were alcohol, deli and frozen food. Fresh food growth was in the mid 20s, driven primarily by meat and produce. Hardlines delivered growth in the low 20s, driven by major appliances, hardware and health and beauty. Meanwhile softlines growth increased to the mid teens, with home furnishings and women's clothing performing well.

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