Costco reported earlier this month that its online sales increased 43.5% compared to the same quarter last year, largely due to website improvements, the ability for shoppers to buy items online and pick them up at the store, and the recent launch of new delivery options. In addition, the company reported that it continues to get a revenue boost from customers who initially come into the store for food, but end up purchasing non-food items as well. (Those who shop at Costco know that it’s hard to get out of the store for less than $200!)
Even with the online boost, about 95% of Costco’s sales occur in stores.
Costco, the third largest grocery retailer in the U.S. behind Walmart and Kroger, reported net income in the third quarter of $640 million, a 17% increase from the same quarter last year. Membership fee revenue climbed 9.8% to $692 million. The company raised membership fees in June.
“Membership trends and renewal rates are still at the 89% and 90% level,” according to Edward Jones Analyst Brian Yarbrough. “I think the model continues to work very well. They’ve got food that’s over 50% of their business, and that drives traffic. And they have great deals, and that creates a treasure hunt nature.”