Costco UK has filed its latest accounts with Companies House revealing turnover (including its online sales) for the 53 weeks to 3 September up 14.7% to £2,382m, representing 52-week pro rata growth of 12.6%.
The business currently operates 28 warehouses, with the target of growing that number to 35 to 40 in the longer term. With its ongoing focus on offering the lowest possible prices, gross margin stood at just 2.7%.
Expansion of fuel making material growth contribution
Costco continues to add fuel forecourts to its existing UK warehouse sites, and added a further five in 2016/18, which contributed 24% of the total turnover growth in the year. Having added another since the end of the financial year, it now operates 12 forecourts, with plans to have petrol filling locations at the majority of its warehouses in the future. The next forecourt will open at its Glasgow warehouse.
As well as adding an additional category of sales, the availability of fuel is credited with boosting member numbers, increasing shopping frequency and bringing incremental sales to other departments too.
Strong in-store sales driven by FMCG categories
As well as benefiting from the increases in the cost of club membership at the beginning of the year (10% for trade and 12% for individual members), Costco has singled out tobacco, alcohol and chilled & frozen foods as the 'particularly strong' performing departments in the year. Women's apparel, housewares, special events and bakery were also buoyant, with the product offer as a whole boosted by an increased push on promotional activity across the store.
Online sales up 11%
Costco's online business has continued to grow, reaching £66m on a 52-week pro rata basis. However, the rate of growth has slowed from almost 30% seen in the previous year. Now operational for five years, Costco's focus in its online business is to build profitable sales. In this latest period the online business made an operating loss of £1.9m.