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Strong December sales give Costco early Q2 boost

Increased traffic helps drive nearly 16% U.S. comparable-sales gain

Russell Redman

January 6, 2022

3 Min Read
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In December, Costco Wholesale saw online sales climb 17.8%, exceeding the 12.2% growth recorded for November.Costco

Costco Wholesale got off to a strong start in its fiscal 2022 second quarter with double-digit net and comparable sales growth in December.

For the five weeks ended Dec. 28, net sales rose 16.2% to $22.24 billion from $19.14 billion a year earlier, when sales grew 12.3%, Issaquah, Wash.-based Costco reported yesterday after the market close.

Overall comparable-club sales in December climbed 14.5% and were up 11.5% excluding changes in fuel prices and foreign exchange (FX) rates, topping prior-year comp-sales growth of 10.7% (10.9% excluding fuel and FX).

By business unit, December comp sales advanced 15.9% in the United States (11.5% excluding fuel and FX), 16.5% in Canada (13.6% excluding fuel and FX) and 6.4% internationally (9.6% excluding fuel and FX), the warehouse club chain said. 

E-commerce sales, meanwhile, increased 17.8% on a comparable basis for the month and were up by the same percentage excluding FX. That compared with a 12.2% gain in November (11.7% excluding FX).

December’s results extended the momentum from November, when Costco tallied gains of 15.7% in net sales and 14.1% in comp sales, the latter including 14.3% growth in the U.S.

“Our comp traffic, or frequency, for December was up 9.8% worldwide and 8.5% in the U.S.,” David Sherwood, assistant vice president of finance and investor relations at Costco, said in a phone report late Wednesday. “Worldwide, the average transaction for December was up 4.3%, which included the positive impacts from gasoline inflation and FX.”

Related:Costco Q1 repeats strong prior-year performance

Relative to the U.S. dollar, FX negatively impacted Costco’s total net and comp sales in December by 0.75%, reflecting impacts of 0.2% in Canada and -5.1% internationally.

“Gasoline price inflation positively impacted total reported comp sales by approximately 3.8%,” Sherwood said. “The average worldwide sale price per gallon was 47% higher compared to last year.”

In the U.S., regions and markets turning in the top December performances were Los Angeles, San Diego and Texas, with the United Kingdom, Mexico and Japan generating the strongest results internationally, Sherwood reported.

“December inflation was relatively consistent with what we saw in November, with the largest impacts in fresh foods and food and sundries,” he said. “Moving onto merchandise highlights, the following comparable-sales results by category for the month exclude the positive impacts of foreign exchange. Food and sundries were positive high single digits. Deli and food were the strongest departments. Fresh foods were up low double digits; better-performing departments included bakery and service deli. Nonfoods were positive low double digits, and better-performing departments included toys and seasonal, tire shop, domestics and jewelry. Ancillary businesses were up mid-40s. Gas, food court and hearing aids were the top performers.”

Related:Club channels, online retailers may have the edge in grocery in 2022

For the 18 weeks through Jan. 2, Costco totaled net sales of $76.34 billion, up 16.6% from $65.47 billion in the year-ago period.

“We view December comps as a solid start to Q2, and the stability in the nonfoods two-year stack as supportive for general merchandise and holiday sales,” Jefferies analyst Stephanie Wissink wrote in a research note late Wednesday.

“Based on prior COVID-19 case peaks during holiday 2020 and late summer with the Delta wave, we believe the current Omicron surge could lead to increased at-home products demand,” she added.

Currently, Costco operates 828 warehouse clubs overall, compared with 803 a year ago. By market, the retailer operates 572 clubs in the U.S. and Puerto Rico, 105 in Canada, 40 in Mexico, 30 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 13 in Australia, four in Spain, two each in France and China, and one in Iceland. Costco also runs e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.

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About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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