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Costco rolls out expanded delivery options amid Q4 results


ISSAQUAH, Wash. — Costco Wholesale Club is upping its home delivery game for online food orders as the grocery delivery market continues to heat up.

The retailer has introduced a new two-day delivery service, called CostcoGrocer, for customers across the United States (with the exception of those in Alaska, Hawaii, and Puerto Rico.). The service, which has a fee of $3, offers delivery of non-perishable foods and sundries, with about 500 items available. The delivery fee is waived for orders over $75.

Costco also is expanding its same-day delivery partnership with Instacart to more markets. The program, which includes both dry and fresh foods, is available at some 375 Costco locations. It also is being expanded to include more products.

Costco's moves to expand online delivery come as Walmart and Target are also upping their games. On Oct. 3, Walmart announced it had acquired Parcel Inc., a last-mile delivery startup that specializes in delivery of perishable items and general merchandise to customers in New York City. Target recently expanded the rollout of its next-day delivery service of household essentials, Target Restock, to eight new markets.

“There’ll be a number of additional U.S. locations planned – added between now and the end of calendar 2018 as our partnership expands,” Costco CFO Richard Galanti said during the company’s fourth-quarter earnings call.

The call accompanied the wholesaler’s posting of better-than-expected fourth-quarter sales results, which notably saw e-commerce sales rise 21% over the year-ago period.

Net sales for the 17-week fourth quarter ended Sept. 3 rose 15.8% to $41.36 billion, compared with $35.73 billion in the year-ago period, which had 16 weeks. Total same-store sales rose 6.1%, with a 6.5% increase in the United States and a 4.9% increase in Canada. International same-store sales rose 5.6%.

Costco's net income for the quarter was $919 million, compared with $779 million last year. 

Net sales for the 53-week fiscal year rose 8.7% to $126.17 billion. Net income was $2.68 billion, compared with $2.35 billion last year.

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