Costco sustains gains in same-day delivery

ISSAQUAH, Wash. – Costco Wholesale Corp. said e-commerce sales are up about 20% this year as the warehouse club operator expands same-day delivery.

Earlier this month, Costco announced expanded partnerships with DoorDash and Uber Technologies, extending same-day delivery to more U.S. customers.  

These partnerships complement Costco’s long-standing relationship with Instacart, Ron Vachris, Costco’s chief executive officer, said September 24 on the company’s fiscal fourth-quarter earnings call.

“I think we feel pretty good about where we are with the digital engagement and delivery times. Be it in big and bulky, we've made some significant improvements in the past five years, bringing our times of delivery of furnishings and appliances from four to five weeks down to three and four days,” Vachris said. “The same type of improvement has been experienced in same-day delivery. The majority of these deliveries are done within 45 minutes, if that what the customer wants.”

Members typically use same-day delivery as “fill-in shops,” Vachris said, and continue to visit the clubs.

“We see it as a great addition to the offering, and there is a subset of people that really take advantage of this, and that tends to be the younger customers that we have [who] resonate more with the immediacy of delivery,” Vachris said.

Costco sales climb 11% in fourth quarter, top $297 billion for year

Digital sales growth outpaces overall comps as the warehouse club operator delivers another year of broad-based gains.

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This month, DoorDash announced that Costco is now available on the DoorDash Marketplace across the United States, with same-day delivery by DoorDash.

Also this month, Uber said an expansion of its Costco partnership means that on-demand or scheduled deliveries of Costco merchandise through Uber Eats is now available in 47 states, up from 17 previously.

Costco reported an 11.2% increase in net sales in its most recent quarter. Comparable-store sales rose 9.4%, driven by gains in ancillary businesses and digital channels. Costco reaffirmed plans for 30 net new warehouses per year and expects continued top-line growth supported by member retention and expanding digital engagement.