We review Costco’s April performance as social-distancing measures impacted traffic and sales.
Net sales fall 1.8%
Costco’s net sales in April fell 1.8% to $11.4bn, while comparable stores sales fell 0.5%, excluding the impact of fuel and foreign currency movements. Comp sales were flat in the US, down 5.0% in Canada and up 2.0% in other international markets. The performance was impacted by stay-at-home mandates, social-distancing measures and some mandatory closures. The retailer also offered only a limited service in its travel and food courts businesses, while most of its optical, hearing aid and photo departments were closed. Comparable store sales excluding these departments, fuel and currency movements were up 8.6% for April.
Source: IGD Research
Ecommerce sales up 87.7%
Traffic to its clubs was down 19% globally and down 16% in the US, although average transaction value was up 18%. This reflects broader industry trends with shoppers undertaking fewer trips but building larger baskets. The retailer also saw a significant increase within its ecommerce business, with comparable store sales up 87.7%. Growth in this channel has also been one of the defining trends of the coronavirus (COVID-19) pandemics.
Growth driven by grocery departments
Costco experienced sold growth within its food and sundries business, with comparable store sales up in the mid-teens. Fresh foods sales growth was in the low 20s, led by fresh meat and produce. Hardlines comp sales were up in the low single-digits while softlines were down in the low 20s, led by luggage and clothing. For the year to date, Costco’s comparable store sales (eclusing fuel and currency impacts) are up 6.9%, approximately where it was at its half year in mid-Feb. The gains it made in March have been counter-balanced by the challenging trading conditions in April, although ecommerce sales are significantly ahead of last year, up 29.9% year to date.
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