According to data from analytics company Placer.ai, Costco Wholesale Corp. is experiencing a surge in foot traffic during the back-to-school season.
Impressive Growth for Costco
Placer.ai's marketing content manager, Shira Petrack, highlighted Costco's remarkable growth in a recent blog post. Over the past few years, the company's visit share within the superstore space has steadily increased. In fact, Costco emerged as the leader in year-over-year visit growth during the recent back-to-school season.
Consistent Increase in Visits
Placer.ai data reveals that Costco witnessed a 3% year-over-year increase in visits during August, followed by a 4.5% rise in July and a 3.6% uptick in June. In contrast, other wholesale clubs and superstores experienced declines of 1.9% in August and 0.4% in both June and July.
Strong Financial Performance
Costco's success is further evident in its financial performance. The wholesale giant reported net sales of $18.42 billion for the four weeks ending on August 27, 2023, representing a 5% increase compared to the same period last year when it generated $17.55 billion.
Costco's Recovery and Growth
Petrack suggests that Costco has not only overcome the challenges faced by the wider retail space earlier in 2023 but has also shown signs of recovery and growth. Alongside expansion efforts, same-store visits have been on the rise. Between June and August 2023, average visits per venue metrics consistently increased year-over-year.
Outperforming Competitors
Costco's visits per venue growth outpaced the broader wholesale clubs and superstores segment. In August, there was a year-over-year increase of 0.7%, followed by a 2% rise in July and a 1.5% uptick in June. In comparison, the visits per venue metrics for the overall segment saw declines of 1.8%, 0.3%, and 0.4% during the same months, respectively.
Costco Wholesale Corp. is undoubtedly commanding the retail industry, benefiting from increased foot traffic during the back-to-school season.
Costco Sees Strong Foot Traffic Growth in Key States
Costco, the popular warehouse retailer, experienced significant foot traffic growth in several key states. According to recent data, New Jersey saw the strongest increase, with a 6% growth between January and August 2023 compared to the same period in 2022. Following closely behind were Illinois and Florida, which experienced growth rates of 4.9% and 3.2% respectively. Nationwide, visits to Costco increased by 1.9% year-over-year during the same period.
This impressive growth indicates a strong demand for Costco's concept. It also suggests that the company has yet to reach its full potential for expansion. Costco has been able to open new stores without negatively impacting the traffic at its existing locations, a testament to its popularity.
As of August 30, Costco operated a total of 861 warehouses worldwide. This includes 591 warehouses in the United States and Puerto Rico, as well as 107 warehouses in Canada. In the first three quarters of its fiscal year, the company opened 14 new locations.
Investors are eagerly awaiting Costco's fourth-quarter results, which are set to be released after the market closes on September 26. Analysts surveyed by FactSet anticipate earnings of $4.79 per share and revenue of $77.72 billion for the quarter.
Despite some recent challenges, such as a drop in e-commerce sales in August, Costco remains well-regarded by analysts. Raymond James recently reaffirmed its outperform rating for the company, and FactSet's survey of analysts revealed that 25 out of 37 have an overweight or buy rating for Costco. Ten analysts have a hold rating, while only two have an underweight rating.
In 2023, Costco's stock has performed strongly, showing a 23% increase compared to the wider market's gain of 13.3% as measured by the S&P 500 index. This positive performance reflects investors' confidence in the company's continued growth and success.
Costco's ability to attract significant foot traffic and maintain strong sales numbers in key states confirms its position as a leading retailer in the industry. As the company continues to expand and adapt to changing consumer demands, it is poised for further success in the coming years.
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