Sep 24, 2020
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New York(CNN Business)Curbside pickup is exploding in the pandemic as more people choose to order online and scoop up their groceries outside the store without leaving their car. But you won't find that option at a Costco store anytime soon.
The warehouse chain has long held that curbside pickup doesn't make sense to offer, mainly because it doesn't have the space in its stores to pull it off and because it wants customers to come inside its locations to make impulse purchases. That's even as rivals like Walmart-owned Sam's Club, Kroger and Whole Foods expand their own curbside pickup offerings.
That could be a mistake in an environment where online ordering is taking off, retail analysts say.
Picking up groceries has become popular in the pandemic because shoppers want to limit their time inside stores. It can also be faster for customers than waiting for home delivery, and there are no delivery fees.
In August, 25.5 million households bought groceries online and then picked them up at stores, according to a survey of 1,817 consumers conducted August 24 to August 26 by consulting firm Brick Meets Click. That was up from 10.1 million households in August of 2019, the firm said.
Costco's sales surged early in the pandemic as people rushed to stock up on groceries as they faced stay-at-home orders and social distancing rules. But the company, which reports its quarterly results Thursday, has seen sales growth taper off as restaurants reopen and consumers buy less in bulk. Some analysts say that introducing curbside pickup would boost growth.
Costco (COST) is "behind the ball," said Timothy Campbell, analyst at Kantar. "They risk falling behind if they don't invest in pickup. You have customers establishing routines with other retailers."
Michael Jackson, 37, in Round Hill, Virginia, is one customer who's been turning to curbside pickup more often in the pandemic. Although he is a Costco member, Jackson has been ordering up to $125 worth of groceries online for his family of four and driving to pick them up at Walmart and Kroger-owned Harris Teeter during the pandemic.
"It's convenient. I don't have to wrangle around kids in the store and tell them not to touch stuff. I can keep them in the car," he said. "Walmart has dedicated curbside pickup lanes and it works great."