Costco’s sprawling sales floor is sometimes likened to a racetrack, but lately it can feel more like a demolition derby.
It’s a change that has taken a few years to emerge, but new numbers from Placer.ai, a market research firm that analyzes foot traffic, show how much more crowded Costco has gotten in the last few years.
Shopping visits to Costco warehouses ticked up by more than 18% from the first quarter of 2019 to 2026 as US consumers have turned to the club for relief from rising prices (and the occasional free sample).
That growth has come through a combination of visits to new warehouses and increased traffic at existing ones.
By comparison, store traffic trends at Walmart and Target are mostly flat over the same period.
Walmart started from a pretty dominant position, with nearly one in 10 shopping trips in the US taking place at one of its stores, and its e-commerce transformation has helped drive strong sales growth.
Costco has grown its online business, too, but the surge of interest is a decidedly IRL phenomenon — one that poses some key challenges for the company.
On earnings calls over the past couple of years, Costco executives have commented on the crowding issues at warehouses and detailed steps they’re taking to address them.
For starters, they’re building new warehouses near successful ones to relieve some of that pressure.
Costco has also expanded parking lots at higher-volume warehouses in the past, but that can result in larger crowds indoors.
More recently, Costco has been rolling out new tech features, like membership card scanners at the front entrance and a new “scan and go done by Costco” service that involves an employee tallying up a shopper’s order right in their cart.
Retailers generally want people to linger in their stores, since that increases the odds of an impulse purchase, but it doesn’t help business if shoppers feel like they’re trapped.
In other words, Costco wouldn’t want its treasure-hunt shopping experience to turn into a desert-island survival situation.
So far, Costco seems to be handling the balance pretty well.
Read the full article here
