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Costco first quarter not as weak as it seems

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Coscto

Source: Costco Wholesale & Retailing Today

Don’t be fooled by Costco’s tepid sales growth and first quarter profit decline. The company is accelerating expansion and pursuing some intriguing digital partnerships while members continue to renew at record rates.

Costco is planning on a net increase of 32 new warehouses (10 more than last year) during the current fiscal year and 13 of those locations opened during the company’s first quarter ended Nov. 22. Of the 13 new clubs, seven are in the U.S., and of the full year total of 32, 22 will be in the U.S. The company ended the first quarter with 697 clubs, of which 487 are in the U.S., where it enjoys a 91% renewal rate and it executive memberships (those who pay an annual fee of $110) continues to grow.

 

Click here for Costco’s full quarterly report

Click here for Retailing Today article

Top Kroger Executive Joins 99 Cents Only

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In another indication of its growth aspirations, 99 Cents Only named a former high ranking Kroger executive president and CEO just months after the retailer tapped former Walmart executives to fill the head merchant and CFO roles at the 389-store retailer.

Former Kroger and Procter & Gamble executive Geoffrey Covert, 64, was named president and CEO at 99 Cents Only on Sept. 11, filling a position that had been held on an interim basis the past four months by board chairman Andrew Giancamilli. The day prior to 99 Cent’s Only announcement, Kroger announced a series of personnel moves including the departure of Covert who was stepping down from his role as senior vice president of retail operations after 20 years with the company. Covert had spent 22 years at Procter & Gamble prior to joining Kroger in 1996. In a statement, Kroger Chairiman and CEO Rodney McMullen wished, “him and his family the very best in retirement.”

Less than 24 hours later, in a statement by 99 Cents Only Covert said he was excited to be joining a growing and transforming business.

“I was attracted to 99 Cents Only Stores’ strong fundamental business strategy, longstanding brand loyalty among customers, and its long-term growth potential in the extreme value sector,” Covert said.

 

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What is a Costco membership really worth?

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Costco , Sam’s Club of Wal-Mart , and privately owned BJ’s Wholesale offer over 1,475 membership-only warehouse club locations throughout the world. In contrast to much of the rest of the retail industry, Costco has continued to outperform while increasing its membership and net sales annually. This is despite the pressure from online retailers like Amazon.com  on the retail industry. Going forward, though, what is a Costco membership really worth?

Read article here