Why Costco Sales Just Dropped For The First Time In Years

Despite initial reports of shopper slowdowns in April, Costco sales have remained strong for more than a decade, since the recession of the late 2000s, as Fox Business reports (via The Wall Street Journal). However, those early-April alarm bells were apparently predictive, as "comparable sales" among locations open for the past year or more fell by 0.5 percent in the four weeks leading up to May 3 — and counting gasoline purchases, that percentage balloons to 4.7.

Compared to April 2019, net sales dropped by 1.8 percent, a decrease that the company associates with necessary COVID-19 measures, according to Business Insider. In other words, Costco, like many retail stores, was buffered about by an array of business blows, including reduced store hours and purchasing limits on items shoppers were panic buying. Execs said in a statement, "Stay-at-home orders, social distancing restrictions, and some mandatory closures led to decreased traffic and sales in our warehouses."

The company further explained it contended with "limited service" in its Costco Travel centers and food courts, the closing of "optical, hearing aid, and photo departments," and less gas sales as prices dipped and fewer people were traveling by car — those changes alone accounted for a 12 percent decline, with 70 percent of that being gas-related.

It's not all bad news for the wholesale corporation. Costco shoppers on lockdown increasingly turned to online retail operations instead, with Business Insider reporting that its e-commerce sales shot up by almost 88 percent in April alone.

Meanwhile, CNN notes that Costco had already majorly cashed in on those early days of panic buying from concerned consumers: As they swarmed shelves for food and supplies, sales in February increased by 12.4 percent, and by 9.6 percent in March, compared to those months' sales in the previous year.

And though April at a glance shows an overall sales decline, the company noted "week-to-week improvement in sales and traffic for all four weeks" throughout the month, which may receive a further boost as operations in some areas try to return to pre-pandemic hours and employees go back to work (via The Wall Street Journal).

Ultimately, analysts tell CNN that Costco should have a bright future, as big-box retailers swoop in to swipe shoppers from malls and department stores, leading them to predict "solid sales" and "high membership renewal rates" in the still-unpredictable months (and perhaps years) ahead.