Dive Brief:
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Bending to the forces of the strong dollar and lower fuel prices, Q1 same-store sales at Costco Wholesale Corp. slipped 1%, the first quarterly same-store sales dip since 2009.
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Taking out the effect of the dollar and gas prices, same-store sales were otherwise up 6% and average purchases per shopping trip actually rose 2.5%.
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Sales of memberships — Costco’s major source of revenue — were up $584 million from $561 million year over year.
Dive Insight:
While a slide in a key sales measure may seem alarming, this was something of an isolated phenomenon for Costco. But as long as fuel prices remain volatile and the dollar stays strong, it could continue.
Regardless, the retailer will likely continue to prosper with its basic approach of keeping prices low on good-quality merchandise, reaping profits on memberships, and offering excellent customers service to help drive and keep those memberships.