Costco Sales Dip Marginally

Costco Wholesale Corporation (COST - Analyst Report), the fifth largest general retailer in the U.S., has reported a better-than-expected performance in same-store sales in August with a marginal dip of 2% compared to an average analyst prediction of 5.7%.

Same-store sales measure sales at stores which have been open for at least a year, and are a widely used metric to gauge retailer performance as they measure growth at existing stores rather than at the newly opened ones. August same-store sales of Costco decreased 4% across the U.S. locations, while increasing 3% in the international division.

According to the company, the August results were negatively affected to some extent by the shift of the Labor Day holiday to one week later in the calendar. Costco further revealed that discretionary items such as food and sundries reported comparatively improved sales vis-à-vis non-food discretionary items in the month.

The recent figures are quite significant as they point to the gradual recovery of the economy. Jones Lang LaSalle Incorporated (JLL - Analyst Report), a leading real estate investment trust (REIT) in the U.S., had predicted in its recent survey that the retail market is likely to recover in 2010, with discount retailers benefiting the most from the recovery. In order to support its claim, the report had also cited the meteoric rise of Costco, and had pointed to the shift in balance from more premium-based shopping trends to value-for-money buys.

Costco operates an international chain of membership warehouses that feature branded merchandise at substantially lower prices than conventional wholesale or retail sources. The warehouses present a diverse range of product categories under a single roof, including groceries, candy, appliances, automotive supplies, toys, hardware, sporting goods, jewelry, watches, cameras, books, apparel, tobacco, furniture, office supplies and office equipment.

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