Accounts filed by warehouse club operator, Costco UK, for 2018/19 show its sales increased by 2.9% to reach £2,618m over the 12 months. Operating profit rose by 32.4% to £19.2m, with operating margin up to 0.7%.
Currently operating 29 warehouses
Costco added one further warehouse in the course of the year, at Stevenage, bringing its UK total to 29. As with other new sites, Stevenage included a petrol forecourt as part of the development and meanwhile the business has continued to roll out petrol forecourts to its existing sites too. Fuel facilities have now also been added to the warehouses in Leicester, Southampton and Coventry taking its total number of UK forecourts to 17.
Online sales reached £96m
Reported as a separate business, Costco’s online operation saw sales up 26.8% in 2018/19, driven primarily by non-food categories including electrical goods, sports and furniture. In response to the pandemic emergency Costco has also launched a grocery delivery business in 2020 which is reported to have taken off ‘very well’. In line with the wider retail sector Costco has seen online sales increase significantly in 2020, and reports current increases in high double digits in many of its key product areas.
Outlook – in-store sales rebounded ‘very strongly’ post lockdown
The business reports that following a spike in sales driven by the early ‘panic’ phase of the pandemic episode there was a brief period of ‘material decline’ after the lockdown measures were imposed. Now, despite loss of sales from the suspension of optical, hearing aid and café operations these have been more than offset by the uplift seen in core merchandise categories meeting the in-home needs of customers. Hence in its current financial period Costco reports sales volumes up by around 10%, driven by higher footfall and larger baskets.