Healthy, fresh food consumption has consistently been on the rise, especially during the COVID-19 pandemic. With consumers opting for healthier options in-store, many retailers have seen a huge increase in their sales, especially Costco. The retailer recently published its fourth-quarter earnings report, which ended August 30. Trends spurred by the pandemic have led the retailer to report nearly $53 billion in sales, with fresh food was one of the main sales drivers.
“Looking at the core merchandise categories in relation...to only their own sales, so core-on-core, if you will, margins year over year were up by 70 basis points,” said Richard Galanti, Director, Executive Vice President, and Chief Financial Officer. “Fresh foods was the biggest driver of the year. With the strong sales in fresh, we benefited from efficiency gains in both labor productivity and significantly lower, what we call, D&D or damage and destroyed or products spoilage.”
Costco’s net sales for the quarter increased 12.5 percent, jumping to $52.28 billion from $46.45 billion last year, according to the report. Net sales for the fiscal year increased 9.3 percent, increasing from $149.35 billion last year to $163.22 billion. Another contributor to this growth was Costco’s e-commerce division.
“Total online grocery grew a very strong rate in Q4, several at 100 percent,” Galanti continued. “Overall, our e-comm sites were [running] relatively smoothly during the quarter despite the dramatic volume increases and we were able to improve...on delivery times throughout the quarter as we adjusted to the ramped-up order volumes.”
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