Costco's Sales Fall for First Time in Nearly a Decade
07 May 2020 - 9:45AM
Dow Jones News
By Sarah Nassauer
Costco Wholesale Corp.'s monthly sales fell for the first time
since the recession, as stay-at home orders and social-distancing
restrictions reduced shopper traffic and some parts of stores
offered limited service.
Comparable sales, those from stores and digital channels
operating for at least 12 months, fell 0.5%, excluding the impact
of gasoline and currency fluctuations, for the four weeks ended May
3. Including those items, sales fell 4.7% as low gas prices further
pushed sales down.
"April sales were negatively impacted by Covid-19," said the
company, one of the few retailers that still reports monthly sales.
Costco cited stay-at-home orders, social-distancing restrictions
and some mandatory closures for the lower traffic and sales, as
well as scaled-back service in areas such as the food court and
optical department.
Collectively, the negative impact of Covid-19 and low gas prices
reduced comparable sales by around 12%, the company said. Excluding
the impact of gas prices, optical, travel, the food court, hearing
aids, photo and currency fluctuations, sales rose 8.6%.
The April results marked the first monthly decline since July
2009.
Many retailers deemed nonessential by local governments have
closed and furloughed workers. For those deemed essential, staying
open has brought its own set of challenges.
Open retailers experienced a massive sales surge early in the
U.S. outbreak, as shoppers flocked to stores to stock up on
cleaning supplies and food in late February and early March.
Walmart Inc. store sales rose nearly 20% in March, The Wall
Street Journal reported last month.
Target Corp. sales rose 20% in stores and digital channels
during the first three weeks of March. But that growth slowed in
April, up 5% at Target in the first three weeks of the month as
more shoppers stayed home, the company said. Target has also said
that profits this year will be lower than previously expected due
to the higher percentage of online sales and investments related to
the new coronavirus, such has added labor and cleaning.
Retailers have also struggled to staff stores. As of last month,
10% of Walmart's U.S. workers, or about 150,000 people, were out on
coronavirus-related leave, the Journal said. Walmart has hired
around 200,000 additional workers to meet sales demands, the
company said last week.
Costco said comparable sales rose 12.1% in February, boosted by
coronavirus-fueled panic buying. In March, that growth cooled
slightly, with sales slowing during the second half of the month as
the company reduced store hours and restricted sales of certain
products deemed nonessential by some regulators, the company said
last month. March comparable sales rose 9.6%.
While coronavirus hit sales in April, "we did see week-to-week
improvement in sales and traffic for all four weeks," the company
said on a prerecorded call Wednesday. Some Costco stores are
returning to regular opening hours as more states open and people
return to work, a spokesman said last week.
Over the past month shoppers continued to favor food and
household goods, while buying less luggage, apparel and jewelry,
the company said.
Write to Sarah Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
May 06, 2020 19:30 ET (23:30 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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