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.
“For 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,” Short wrote. “These 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.”
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.
Write a Reply or Comment:
You must be logged in to post a comment.