Costco’s sales bounce back in May

Date : 04 June 2020

Stewart Samuel

Program Director - Canada

We review Costco’s May performance as trading evolves into a more normalised pattern and retailers start to adjust their strategies to win the one big shop.

Asia recovery underpinning bounce-back

Following a decline of 1.8% in April, including a fall of 0.5% in comparable club sales, the retailer’s performance bounced back in May. Net sales increased 7.5% to $12.6bn. Comparable club sales, excluding the impact of currency movements and fuel, increased 9.7%. This was led by its markets outside North America, up 17.9%, with Japan, Taiwan and the UK delivering the strongest growth. Comp sales were up 9.2% in the US and up 4.9% in Canada.

Source: IGD Research

Food growth remaining strong

The coronavirus pandemic continues to impact the business with non-food sales rebounding and fresh foods remaining strong. Food and sundries growth was in the high teens while fresh food growth, led by produce and meat, was in the low 20s. Hardlines also delivered a similar rate of growth, driven by major appliances, sporting goods and hardware, while softlines growth was in the low single digits and improving.

Winning the big shop

Ecommerce sales accelerated in the month, up 108.1%, underpinning growth of 38.1% year-to-date. This builds on growth of almost 90% in April and reflects a broader trend globally due to the coronavirus pandemic. While global traffic to its clubs was down 7.9% (down 4.8% in the US), transaction size was up 14.4%. This has also been a key feature of the pandemic as shoppers shift their behaviours to complete fewer, but larger shopping trips. For retailers, winning what is invariably becoming one big shop is going to be a key part of their strategy going forward as they adjust to this new pattern.

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