Costco reaps $1.5B in sales growth as COVID-19 crisis unfolds in March

Local News

A line of people waiting to buy supplies amid coronavirus fears snakes through a parking lot at a Costco, Saturday, March 14, 2020, in Las Vegas. For most people, the new coronavirus causes only mild or moderate symptoms. For some it can cause more severe illness, especially in older adults and people with existing health problems. (AP Photo/John Locher)

LAS VEGAS (KLAS) — Warehouse stores have seen sales surge during the COVID-19 pandemic as consumers stockpiled paper products, water and canned goods.

In an April 8 report, Costco reported an 11.7% gain in sales — $1.5 billion — as the crisis unfolded through March. Sam’s Club reported more modest 1.6% growth, but that covered three months. March figures are unavailable.

“Costco is among the strongest retail brands and there is no better example of the company’s unique position than the flood of visitors in the early stages of the coronavirus,” retail expert Ethan Chernofsky of Placer.ai said. Some market analysts were expecting even bigger growth.

The panic buying is subsiding — or maybe just shifting as the food supply chain faces shutdowns at meat-packing plants. Club stores are trying to control their own customers’ demand for more, in the interest of making sure all of their customers have a shot at stocking up. Social distancing rules that led to limited customer numbers inside stores — and long lines just to get in — have also put a damper on bigger sales growth.

And reports show that even the warehouse stores are shifting more toward online sales.

Costco reported that digital sales grew by 48.3%, compared to 10.7% growth in stores.

If “non-essential” businesses begin to open with new social distancing rules in place and new sanitizing practices, the warehouse stores might see some of their customer base spend money elsewhere.

But for now, big retail stores like Walmart and Target, along with warehouse stores have a strong hold on consumers. And they are trying to keep their hold on it, extending hours at gas pumps and providing benefits for health care workers, first responders and senior shoppers.

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