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Costco: Remarkable June, but Will Gas Have Same Impact in July/August?

Thomas Paulson
Jul 8, 2022
Costco: Remarkable June, but Will Gas Have Same Impact in July/August?
  • Costco's U.S. June comparable store sales (ex gas) increased +10.2% (adjusted to remove the benefit from one extra shopping day), compared to +10.7% in May. U.S. adjusted comparable store transactions were +6.0% (versus +6.1% in May, +3.6% in April, and +7.0% in March), while comparable store ticket (ex-gas) was +4.2% higher (versus +4.6% in May, +4.5% in April, and +5.7% in March).
  • Fresh category comparable sales were up high-single-digits (versus +HSD in May). Food and sundries grew at a mid-teens pace (versus high-single-digits in May, driven by cooler, sundries, and food). Non-foods growth came in just under +10% growth (versus low-double-digit growth in May), with strength in garden, toys, seasonal, tire, and automotive. The ancillary business grew +high 50s driven by gas and the food court.
  • While the ancillary number looks good on the surface, it's tempered by the fact that gas prices themselves are up over 50% alone. And so, when looked at through Placer.ai, one can see that the lift to visits from trips to their fuel centers is moderating. Thus, it will be interesting to watch if that continues. Should that moderation continue, we would expect Costco's traffic and comparable-store sales to follow, resulting in a break in Costco's spectacular run of double-digit comp store sales gains. Also of note, Costco's more affluent customers are more prone to international travel, which is something else to watch for.

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Thomas Paulson

Director of Research and Business Development, Placer.ai

Thomas Paulson spent 20 years as a Wall Street analyst and a member of asset management teams at AllianceBernstein and Cornerstone Capital, representing top-50 ownership positions including Target, Home Depot, Nike, Amazon, Google, and many more.

He brings consumer related expertise and knowledge of enterprises in retail, CPG, financial services, telecom, and entertainment.

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