In 2024, Costco is set to roll out six major changes, signaling a significant shift for its members. Additionally, shoppers should prepare for a possible increase in membership fees, as the company's CFO hinted.
A retail giant, Costco is known for its great prices and new products. Their business strategy is to keep members engaged and wanting more by constantly updating in-store offerings and inventory.
However, the company's innovations go beyond product modifications. Costco is quietly improving its wide variety of services and the shopping experience in physical and online stores.
Due to these considerable advances, media, investors, retail experts, and competitors noticed Costco's wholesale market influence.
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Major Changes at Costco in 2024
First, Costco is set to expand significantly in the coming fiscal year, with plans to open 31 new stores. This information was disclosed by Richard Galanti, the Chief Financial Officer, during a December earnings call, as reported by The U.S. Sun.
This move marks an increase from the previous year when 23 new stores were opened. Additionally, two existing Costco locations are slated for relocation.
Moreover, Costco is making headlines with its plans to open its largest location. A projected Fresno, California Costco store will be 241,000 square feet, compared to the usual 146,000. This addition accommodates a typical store and online order fulfillment center.
Besides size, the Fresno store will have a vehicle wash, 32-pump petrol station, and 900 parking spaces. Costco is also improving its internet presence to compete with Walmart and Sam's Club.
The Costco app lacks barcode scanning and online inventory checks, but executives promise upgrades. However, the launch date for these new app features is unknown.
Costco, not known for technology innovation, has improved its digital services in the past year. The company focused on app and internet enhancements, which increased app downloads by 10% in the quarter ended November 26. New features, including a digital membership card and shopping list, have increased downloads to 30.5 million.
Despite these advances, Costco members still want barcode scanning and online inventory checks, which Walmart and Sam's Club offer. These easy tools have been promised by Costco management since January, and they may arrive in 2024.
In a recent earnings call, Galanti said e-commerce and the app's primary goal was to "fix the foundation." He also stated that "targeting and personalization" will be prioritized to improve customer satisfaction.
Costco Leadership Change and Food Court Update
In a significant leadership shift, Costco announced that Craig Jelinek, the current CEO, will step down on January 1, 2024, with Ron Vachris, the current President and COO, set to succeed him. Vachris has a 40-year history with Costco, starting as a forklift driver and advancing through various roles within the company.
Jelinek expressed his complete confidence in Vachris's capabilities, and Galanti emphasized during the earnings call that the transition will be smooth and Costco will maintain its current course.
In other news, Costco's food court changes are stirring customer discussions. Recent adjustments include replacing traditional seating with standing tables at some locations, which has drawn criticism for not being convenient for all customers, particularly children.
Additionally, a rumor, sparked by a Reddit post and unconfirmed by Costco, is that the famous churro might be removed from the menu, potentially replaced by cookies.
Costco's Financial Growth and Membership Stability
Despite previous suggestions of a potential increase in membership fees, Galanti clarified after the financial update on December 14 that there had been no need for such a hike.
Costco has experienced a strong 2023, especially in the recent quarter, with significant growth in sales and profits. Notably, the company reported a 2.6% increase in sales at its existing U.S. stores.
In addition to these financial successes, Galanti highlighted the positive trends in membership, with more people renewing their memberships and a steady influx of new members, indicating a robust performance in this area.
Related Article: COSTCO Reveals No Immediate Membership Price Hike Despite Strong Performance
