Costco's growth slowing down
The American warehouse club giant has seen the slowest growth since Q3/2015, as the Q1/2023 revenue growth slowed to 2%. However, one should not forget that Costco has reported positive quarterly growth for 55 quarters.
The growth rate was driven by International, where Costco grew by 8,4% compared to 1,8% growth in the rather saturated US market (Excluding the impacts from changes in gasoline prices and foreign exchange). Regarding International, in Europe, Costco operates mainly in the UK with 30+ warehouses. However, the company is expanding in many European markets, such as Spain, France, and Sweden.
The biggest growth story for Costco by far is China. The company opened its first warehouse a couple of years ago and is now picking up pace with new openings. China poses a huge growth opportunity for Costco.
“China is a big story this year for us. One of the stories is that we opened our first unit in China three and a half, four years ago; our second, a year and a half ago; our third, last December; and three more this year. We’re going to be at six at the end of this year.”
The growth slowdown is emblematic of the overall cooling of consumption in the US. Many non-food retailers have reported low or negative growth numbers. This trend also highlights the strength of the Walmart quarter with +7,6% growth. Grocery did drive growth for Walmart. However, Costco also relies heavily on groceries.
The other comparison from Walmart is their warehouse club chain Sam’s Club, which reported 4,6% growth in the US (more than double of Costco).
