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Costco e-commerce business drives sales growth

CFO says same-day and two-day grocery delivery 'continues to grow nicely'

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During the third quarter of its fiscal 2018, Costco Wholesale Corp. saw tremendous growth in e-commerce sales, which helped drive strong growth in net sales.

For Q3, e-commerce sales grew 36.8% across all operations – which includes sites in the United States, Canada, the United Kingdom, Mexico, Korea and Taiwan – compared with the same period a year prior. Year-to-date growth was 36.1%.

“We continue improving and expanding our offerings,” said Richard Galanti, CFO of Costco, on a call to discuss the earnings period.

Online grocery – both two-day delivery for dry groceries and same-day fresh delivery through Instacart – “continue[s] to grow nicely” since its debut last October, Galanti assured. And while it’s still a small percentage of the total company, existing markets are “seeing good things from it,” as are those where an existing Costco club might be farther away.

Also of note, Galanti said, is the impact of special-purchase items helping to drive click-and-collect sales, with half of shoppers buying items in store in addition to the order they’re picking up.

For Q3, net sales grew 12.1%, to US$31.6 billion, compared with $28.2 billion last year. U.S. comparable-store sales for the period were 9.7%, versus the same period a year prior, and 10.2% for the company overall.

Costco operates 750 warehouses, including 520 in the U.S. and Puerto Rico, 98 in Canada, 38 in Mexico, 28 in the United Kingdom, 26 in Japan, 14 in Korea, 13 in Taiwan, nine in Australia, two in Spain, one in Iceland and one in France.

This article originally appeared at ProgressiveGrocer.com.

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