Costco’s December Sales Spike

Costco had a very merry holiday season, with net sales up to $14.94 billion for the five-week period that ended Dec. 31. — a 14.3 percent increase from the $13.07 billion Costco was reporting the same time last year. Some of that success can be attributed to a little more time: December technically picked up an additional shopping day due to the New Year’s Day calendar shift. The consensus is that extra time gave sales a 2.5 percent boost.

In the first 17 weeks of FY 2018 — which also came to an end on New Year’s Eve — Costco saw net sales up 11.9 percent over the same time in 2016, increasing to $46.06 billion. The extra shopping day did not have much effect on this result.

Same-store sales were up 8.8 percent, with a 9.1 percent increase in the U.S. Same-store sales were up 6.5 percent in the first 17 weeks of the year; eCommerce notched a 32.2 percent gain in December and a 30.9 percent increase during the 17-week timespan.

“To put the company’s performance into some context, December represents the fifth consecutive month of double-digit total sales growth — albeit with very little unit expansion — a testament to the model, which is generating strong comps from both new and mature units,” said Gordon Haskett analyst Chuck Grom in a Retail Dive interview.

Despite the reported result, however, Costco took a late-in-the-week trading dip, as investors were concerned that Costco’s recent show of strength may not be a trend with momentum.

The eCommerce boost is notable, because until recently, Costco was not known for prioritizing the digital commerce experience. Their position is starting to change, however: The warehouse shopping giant has partnered with Instacart, upgraded its website and made a more concerted effort to expand its efforts into the digital arena.

“Their customers are extraordinarily loyal and trust them implicitly,” said Retail Analyst Nick Egelanian, president of retail development consultants SiteWorks International. “They have many internet-only exclusives, but, like in their stores, they are specific and deal-oriented.”

Costco doesn’t boast a massive SKU (stock keeping unit) count: 2,500 SKUs per store is their average.

“In the end, I just think they are a STORE — and a really good and successful one at that — that relies on the in-store experience of the treasure hunt, and the internet just is not an integral part of that formula,” Egelanian concluded.