Costco enhancing e-commerce options

by Keith Nunes
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CostcoGrocery
Costco is offering two new on-line delivery options: CostcoGrocery and Costco powered by Instacart.
 

ISSAQUAH, WASH. — The Costco Wholesale Corp. is adding muscle to its on-line delivery options. During an Oct. 5 conference call to discuss financial results, the retailer highlighted two new on-line delivery options it is testing.

The first is CostcoGrocery, which will feature the two-day delivery of non-perishable food products and sundries items. The second program is the same-day delivery of fresh and dry grocery products through the company’s partnership with Instacart.

With CostcoGrocery, consumers get free delivery with orders over $75. Orders are fulfilled by Costco and delivered via UPS throughout the continental United States.

Richard Galanti, Costco
Richard Galanti, c.f.o. of Costco

“These offer very competitive pricing and value proposition, in fact, significantly better pricing than even we had at Costco.com on many of these items,” said Richard A. Galanti, chief financial officer. “We’d expect to expand these offerings over time.”

Mr. Galanti added that the CostcoGrocery initiative will expose the retailer to potential new customers.

“ …That includes lots of geographies where there’s not a Costco within 150, 200 miles,” he said. “So, we think that we’re going to drive some business outside of our existing members and, by the way, they’re going to need to become a member to do this.”

Costco Instacart
Costco's partnership with Instacart is currently available in 376 of Costco’s locations.
 

The expanded partnership with Instacart is currently available in 376 of Costco’s locations. The program offers 1,700 stock-keeping units of fresh and dry products, and orders may be fulfilled and delivered on the same day.

In fiscal 2017, ended Sept. 3, Costco generated $4.6 billion in e-commerce sales, a 15% increase compared to fiscal 2016 when the company had e-commerce sales of $4 billion. Much of the company’s current e-commerce sales are currently from the sale of apparel, appliances and other non-food items.

Net income for Costco during fiscal 2017 totaled $2,679 million, equal to $6.11 per share on the common stock, and an increase compared to the same period of the previous year when the company earned $2,350 million, or $5.36 per share.

Sales for the year totaled $126,172 million compared with $118,719 million during fiscal 2016. 
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