Costco, hit especially hard by social-distancing rules, sees 90% bump in online sales
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Costco has been open throughout the COVID-19 pandemic, but it’s not what it used to be. There are social distancing lines out in front of stores, masks are mandatory and some merchandise is not available. This week, the retailer releases its first quarter results and outlines how it sees the road ahead.
You’d think people stocking up on household goods would be great for Costco. And it was, initially. But, in April, the company’s sales dropped for the first time since 2009.
Tim Campbell, director of retail insights at Kantar Consulting, said Costco has been hit harder than other retailers by social-distancing policies.
“If you just walk into a Costco, say, versus walking into a Sam’s Club on a normal day, pre-COVID, you would see that the Costco locations tend to be significantly busier,” Campbell said.
He said if Costco has to curb traffic, that might affect its revenue more than some other retailers. At the same time, Costco’s e-commerce sales rose 90% in April.
Phil Lempert, who runs Supermarket Guru said the temptation for Costco might be to ramp up its delivery options as more people shift to contactless shopping.
“But I think that their model is not going to be delivery. I think that their model is going to be where I go online, I can order my groceries and I pick them up,” Lempert said.
He said the company will have to invest in a more robust online interface if it wants to better compete with Amazon and even Walmart, though.
COVID-19 Economy FAQs
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
Are people still waiting for unemployment payments?
Yes. There is no way to know exactly how many people have been waiting for months and are still not getting unemployment, because states do not have a good system in place for tracking that kind of data, according to Andrew Stettner of The Century Foundation. But by his own calculations, only about 60% of people who have applied for benefits are currently receiving them. That means there are millions still waiting. Read more here on what they are doing about it.
What’s going to happen to retailers, especially with the holiday shopping season approaching?
A report out Tuesday from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.
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