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Skip the crowd? Costco expanding delivery options to include free 2-day service

By in Press Enterprise on October 6, 2017

By Samantha Gowen

Costco fans, the days of fighting the crush of Costco shoppers on a Saturday for diapers and dog food might soon be a memory.

The big-box retailer this week said it is expanding home delivery across the U.S. to include two-day delivery of dry groceries as well as a same-day delivery for groceries including fresh foods.

The two-day delivery would be free for online orders over $75 across the United States, while the same-day service – offered through Instacart — is available at 376 U.S. stores.

Delivery shipments have a maximum weight of 40 pounds and will ship through UPS.

Loyal shoppers might notice prices online are more expensive than warehouse prices. The club’s popular rotisserie chicken is $5.89 compared with the usual $4.99 in-store price. A 12-count box of croissants is $6.99, a dollar more than the club price of $5.99 for 24 of the buttery buns. Kirkland’s toilet paper, seen stacked onto carts routinely, is nearly $19 online vs. $15.99 in the warehouse.

The news coincided with Costco’s fourth-quarter earnings report, which showed a decline in its gross margins. Competition among grocery retailers has become superheated with Amazon jumping into the fray. Costco’s shares fell 6 percent Friday in early trading as investors reacted to the earnings report.

Walmart and Kroger also saw their shares slip Friday, down around 1 percent.

Costco’s chief financial officer shrugged off Whole Foods and its perceived impact on the grocery marketplace.

“As it relates to the publicity and the news and the noise around Amazon Whole Foods, all we can do is perform,” Richard Galanti said during the post-earnings call Q&A with analysts. “You read about Whole Foods having giant increase in member shops or customer shops that first week. I would hope they do and I would expect them to.”

Galanti also said Costco in fiscal year 2018 would open […]    

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