Why Amazon Can’t Kill Costco – Barron’s
From sporting goods to clothing, Amazon has taken market share from nearly all sectors of retail. But one major old-school retailer — Costco — seems protected from the online behemoth, according to Barclays analyst Karen Short.
Short commissioned a survey of Costco shoppers to determine what they buy there. More than 80% of them said they go to Costco for food, an area where Amazon has had limited success. Another 10% go there for gas, another Amazon-proof area. (Those customers often buy other items too, but their initial intent is to shop for food.)
And the food items they buy are hard for a company like Amazon to ship.
â€œFor those respondents that indicated grocery was the primary reason for visiting Costco, more than half indicated that their top 4 most important categories included frozen foods, meat, and produce,â€ Short wrote. â€œThese items are difficult and expensive to transport for at home delivery without spoilage. Also, many customers like to physically inspect meat and produce before purchase.â€
Importantly, both millennials and Baby Boomers answered the survey similarly, showing that the next generation seems to value Costco for the same reasons.
Big Picture: Amazon is damaging lots of retail business, but Costco seems safe because people mostly go there for food.
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