Turnover and profits have soared across Costco’s UK operations driven by strong fuel and grocery sales.
According to results posted at Companies House last week Costco Wholesale UK saw pre-tax profits jump 44% to £120.6m for the year to August 2022. This was on the back of an 18.2% increase in sales to £4bn.
Fuel sales were also improved by the opening of a new petrol station in Watford, which took the business’s total to 19 petrol stations across 29 warehouse sites.
Grocery sales were also particularly strong, as the company took business off supermarkets, and customers moved away from non-food categories such as electronics, furniture and exercise, it said.
A source familiar with Costco’s UK business said the improved performance has encouraged the wholesaler to focus more on grocery and dedicate more depot space to the category. The source also speculated that UK was becoming a bigger focus overall for the wider Costco business after investment in recent years has been diverted to other European markets such as France, Spain and Sweden.
“There hasn’t been a new depot opening since Stevenage in 2019,” said the source. “They don’t yet have London saturated. Expect an announcement early 2024.”
Costco’s growth in the US appears to have slowed, with analysts citing its saturation of the market and more aggressive competition from the likes of Sam’s Club. US sales in Q3 of FY23 increased by just 1.9% to $52.6bn compared with an 8.8% increase in Q1.
Costco was approached for comment.