Over the past year, wholesale clubs such as Costco have ironically seen an increase in sales despite the COVID-19 Pandemic.

In March, Costco reported that sales rose by 17.6% or $18.21 billion. Same store sales have risen by 16% with a 13.9% increase at United States stores. Online sales have also increased by 57.7%.

As consumers practice social distancing, they tend to take less trips to stores and shop online as often as they can.  When they occasionally take trips to stores, they may, in some cases, turn to buying in bulk and focus on essential needs like food and medical care.

“Certainly, particularly in the last few months, our shopping frequencies have come back and the basket is bigger, implying that there’s market share,” said CFO Richard Galanti, in an article from winsightgrocerybusiness.com.

“When we look at … the industry data by product and category, we’re doing pretty darn well against that. And again, I think it starts with getting into the building. I think the safety protocols, the fact that our buildings are relatively voluminous or big … you feel a little safer when it’s a 12-foot aisle and a 24-foot ceiling than when it’s an 8-foot aisle and 16-foot ceiling.”

One advantage of shopping at Costco over a traditional grocery store is the ability to buy a wide variety of groceries and other goods in bulk at a discounted price, which can help reduce trips to stores. Despite purchase limitations, Costco’s bulky packages of groceries have better deals than traditional packages of groceries that can be found at traditional grocery stores.

“While Costco, like most grocers, put purchase limits on certain items such as beef, pork and poultry, three giant packages of brisket from Costco is good deal more product than three packages of meat at a traditional supermarket,” said Galanti.

In addition to groceries, Costco also reported a rise in sales of non food items. In April and May of 2020 Costco was preparing for a “worst case scenario” if sales of non food items took a serious plummet. In June and July of 2020, sales of such goods such as patio furniture, small electronics, and domestics have exceeded Costco’s expectations.

“To our pleasant surprise, we saw a lot of that pickup,” said Galanti. “People weren’t buying tickets to concerts, weren’t going out to eat, weren’t getting on airplanes or cruise ships or going hotels,” but they were spending on things for the home. Costco initially thought it would need to cut back on orders in March, but then found it was scrambling to keep everything from patio furniture to small-electrics and domestics in supply in June and July.”

Costco was also able to keep many of its goods in stock despite supply chain challenges such as “panic buying” at the start of the pandemic, container shortages, and port delays on furniture, sporting goods, and sundries, chip shortages on electronics, and aluminum shortages on canned beverages.

“We expect these pressures to ease in the coming months, but it’s impacting everyone,” said Galanti. “The cost to the company per shipping container is up 10% to 15%.”🔳