Costco Posts First Sales Slump In Years As Panic Buying Subsides

TOPLINE

After a sales boom over previous months, membership-only grocer Costco reported a drop in sales for the first time in years Wednesday, saying that the coronavirus pandemic has taken a toll on business by decreasing foot traffic.

KEY FACTS

WHAT TO WATCH FOR

If competing grocery stores report a similar drop in sales for April. The same coronavirus crackdown measures are likely to hurt competitors like Wal-Mart, Target
TGT
and other big-box retailers as people stay home. According to foot traffic analytics firm Placer.ai, Costco, Walmart, Sam’s Club and Target locations all had declines in foot traffic around the end of March.

KEY BACKGROUND

Industry-wide, grocery stores experienced a surge of sales in February and March, as panicked shoppers bought essential items in bulk as the first coronavirus cases were reported in the U.S. Since then, American shopping habits have changed drastically—at the onset of the pandemic, items like toilet paper and other household goods flew off the shelves, while last month, companies reported a drop in demand for products like shampoo, deodorant and razors as people stayed home. Other items that can be used at home, like board games,  jigsaw puzzles and baking supplies have jumped significantly in sales. 

FURTHER READING

Costco’s sales fell last month as panic buying slowed (CNN)

Costco’s Sales Fall for First Time in Over a Decade (Wall Street Journal)

Costco sees sales drop as panic shopping wears off and stay-at-home restrictions keep shoppers out of stores (Business Insider)

Here’s Why The Toilet Paper Shortage Is Only Temporary (Forbes)

Quarantined Shoppers May Be Skipping Shaving, Washing Their Hair Less And Not Wearing Deodorant At Home (Forbes)

Toilet Paper To Hair Clippers: American Buying Patterns Shift During Coronavirus Shutdown (Forbes)