Despite its staying open to serve customers and offering the unique benefits that customers love, Costco (NASDAQ:COST) saw declining year-over-year sales in April for the first time since July 2009.
Essentials are not enough
Costco reported a February increase of 12.1% as customers began to stock up before the pandemic, and a March increase of 9.6% as fewer customers ventured outside their homes. April comparable sales fell 4.7%, though e-commerce was up 85.7% as customers turned online to fill their needs.
Costco was highly impacted by some store closures as well as its changes in store operations, which included limited travel service and food courts and closures in the optical, hearing aid, and photo departments. A major impact came from decreased volume in gasoline as well as lower prices, which Costco said accounted for 70% of the drop. Comp sales excluding gas, optical, travel, food court, hearing aids, photos, and foreign exchange increased 8.6%.
In the same boat
Competitors are dealing with similar fallout as customers lower spending outside of essentials. Target (NYSE:TGT) previously announced that March sales increased 20% with a 50% increase in the essentials and food and beverage categories while high-margin goods such as apparel and accessories were down 20%.
While Costco releases monthly sales, its quarterly report is unlikely to show a decrease as March sales were higher and May will probably increase as stores begin to open across the country.