Costco’s net sales over the third quarter increased by 7.8% to $23.6bn, with comparable store sales increasing by 7% (ex-fuel and currency impacts). Net income over the period increased by 18.9% to $459.0m.
Increased visit frequency driving sales growth
Costco delivered another strong quarter, driven predominantly by a stronger visit frequency while average transaction remained broadly flat. Food and sundries growth was in the mid single digits range. On an international basis, Canada and Mexico delivered the strongest performances, with sales relatively weaker in South Korea and Taiwan. Private label penetration continues to grow, with the Kirkland range helping the retailer to deliver “extreme” value in a number of its international markets.
Accelerating new store openings
Building on a strong first half opening program, with Costco opening 14 new stores, the retailer opened a further five stores in the third quarter; two in Japan and one each in the US, UK and Mexico. It anticipates another nine new openings by the end of its financial year, with three new stores in Japan, and one each in the UK, Taiwan and Australia. This will see the retailer add 28 new stores for the year as a whole, representing one of its strongest new opening programs for several years, and in line with the rate which is expected over the next few years.
Online sales up over 20%
Online sales continue to grow strongly, with sales up over 20% year-on-year in the US and Canada. Costco also recently launched its e-commerce proposition in the UK. This has been an area of increased focus for the retailer with investment made in replatforming its operations and launching new mobile apps. One of the key goals has been to increase the visibility of its ranges on search engines, and to drive stronger traffic to its sites.
Want to know more?
Take a look at our regularly updated snapshot for an essential summary of trading priorities, latest developments, and other key commercial insights for Costco. Steve Barnett, UK Trading Director, Costco will be speaking at IGD's Wholesaling 2013 event, 12 September, London, click here for more details.