While online shopping has further penetrated the retail landscape, it still only accounted for 14.7% of overall sales in the U.S. The company sells a fantastic shopping experience first and foremost, featuring low-priced items, great customer service, and treasure hunts. I don't think this consumer behavior will change anytime soon, and it's why Costco has one of the most durable economic moats around.
To hammer home this point, consider that in fiscal 2021 and fiscal 2022, same-store sales were up 16% and 14.4%, respectively. Even during a time like the pandemic, when consumer mobility was restricted and people increasingly turned to online shopping, its value proposition as a one-stop destination to get all your household needs was on full display. And e-commerce comparable sales were down 9.6% in the latest fiscal quarter.Ĭonsequently, it's obvious that Costco's physical stores will undoubtedly still be key to its operations decades from now. While these provide more options for consumers, during fiscal 2022, e-commerce revenue accounted for only 7% of total net sales. Because it can purchase inventory in such massive quantities, prices are kept low.īut for the past couple of decades, brick-and-mortar retailers have always had to consider the 800-pound gorilla in the room, stomping toward them. Costco focuses on a smaller number of national and private-label brands. What does Costco really sell?Ĭostco has had a long history of incredible success by providing its members - 123 million cardholders worldwide - with the highest-quality merchandise at the lowest prices around. Should Costco shareholders worry about the tech juggernaut? It's a safe assumption that many people place Costco at the top of their lists when it comes to getting all of their needs, whether it's food, gas, appliances, or really any other merchandise category.īut the internet age has presented a challenge that investors are certainly aware of, and that's the threat of e-commerce, particularly from the likes of a giant like Amazon (NASDAQ: AMZN). With its trailing-12-month net revenue of $230.1 billion, making it the world's third-largest retailer, there's no denying Costco Wholesale 's ( COST 1.62%) dominance in the world of shopping.
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