Costco announced a strong start to its 2018 fiscal year, with net sales topping $31 billion for the company's first quarter. And the retailer is anticipating more growth to come in both its online and on-ground grocery operations.
On an earnings call following the release of the retailer’s financial report, listeners asked about concerns or noticeable impacts the company may have felt regarding Amazon’s acquisition of Whole Foods—to which CFO Richard Galanti reasoned that Costco’s value proposition has only gotten better.
“You read about Whole Foods having giant increase in member shops or customer shops that first week. I would hope they do, and I would expect them to,” Galanti said, commenting that the lowering of prices gives more confidence that Costco’s value is even greater. “So, we’ll have to wait and see, and nobody can predict everything. All we know is that our brick and mortar is as strong as it’s ever been and trending in the right direction from there.”
Highlights from the first quarter of fiscal 2018 included:
Costco also rolled out two new online delivery-related offerings earlier this month, one that does not yet offer fresh foods and one that does. Galanti described the fresh delivery-included option as an expanded white label same day grocery delivery offering through Costco’s partnership with Instacart.
“You can find both sites by going to costco.com and then clicking on the Grocery tab. You'll then be taken to a page offering and explaining both of these new online delivery options,” he clarified. “376 of our U.S. locations are live with it, and there will be a number of additional U.S. locations planned, added between now and the end of calendar 2018 as our partnership expands. There are approximately 1,700 SKUs, both dry and fresh that are offered and can be fulfilled through the Instacart white label option.”
What does Costco’s strong financial performance bode for the changing brick-and-mortar retail landscape? Deli Market News will continue to bring you the latest in fresh-focused retail news.