Membership club retailer Costco Wholesale has gradually returned to a pre-pandemic pace of store expansion, projecting 30 openings by the end of its current fiscal year as it looks to reach more of its budget-minded customers.
A big push is overseas with planned openings in China, South Korea and Japan, though most of this year’s debuts will be in the U.S. as the Issaquah, Washington-based company expands in untapped suburban areas of states including California, Florida, Texas and Tennessee.
During a quarterly earnings call with analysts, Chief Financial Officer Richard Galanti said global recovery from the pandemic has helped the company get back to overseas growth in regions such as Europe and Asia.
Annual new store openings averaged about 23 globally over the past five years and was the tally for fiscal 2023. Now, growing overseas popularity of Costco's discount membership-based format is helping it regain momentum with development of new stores, Galanti said.
“I’m confident we’re going to open 25-plus for the next couple years, then go to 28 and up from there,” Galanti told analysts.
This year's projection calls for openings of 28 new stores and two relocated stores by the end of the current fiscal year that ends in early September, and about half of those have already debuted.
Costco officials previously said the company is looking to eventually maintain a pace of 30 new store openings annually, about evenly split between domestic and overseas locations.
The operator of 874 warehouse stores worldwide, including more than 600 in the U.S., opened four new stores in its latest quarter. That included three in the U.S. and one in Shenzhen, China that brought its total to six in that country.
For its second half of fiscal 2024 now underway, the company is looking to open 15 new stores, including 11 in the U.S., two in Japan, one in South Korea and one in China.
A listing on Costco’s website shows seven store openings planned this calendar year between March and June, in cities including the Sacramento suburbs of Natomas, Loomis and Riverbank, California; North Port, Florida; Mt. Juliet, Tennessee; Richmond, Texas; and Jiangning, China.
According to regional media reports during the past month, Costco also has stores in early planning phases in cities including Littleton, Colorado and Buckeye, Arizona.
The company has more than 100 stores in Canada and during the past three years has debuted or expanded its presence in countries including the United Kingdom, Mexico, Australia, New Zealand, Spain, France and Iceland.
The retailer posted a 4.8% annual gain in customer visits during the fourth quarter of calendar 2023 and registered a 2.1% annual increase for January, according to traffic analytics firm Placer.ai. Researchers said Costco’s 6.8% traffic gain for full-year 2023 topped the 6.3% increase for rival warehouse chain Sam’s Club and 6.1% gain for BJ’s Wholesale Club.
Budget-minded customers helped the warehouse chains top customer traffic gains of other major retailers, as Target posted a 4.7% traffic increase for the year and Walmart’s customer visits grew 2.8%, according to a report this week from Placer.ai.
For its second fiscal quarter ended Feb. 18, Costco reported total revenue of $58.4 billion, up from $55.3 billion a year earlier. Net income was $1.7 billion, up from $1.5 billion in the year-earlier quarter.