Costco Finally Joins Curbside Pickup Trend With Pilot Program

Costco Wholesale Corporation COST is joining the grocery curbside pickup trend with a pilot program at a few stores in New Mexico.

What Happened: According to Costco's New Mexico webpage, consumers can place orders for curbside pickup at three Albuquerque, New Mexico warehouses.

All grocery items, including fresh and select non-food items, are available for sale.

Consumers go to Costco.com, select "grocery," order food, then choose a one-hour pickup window with updates via text message about when the order will be ready.

Consumers drive to a reserved part of the parking lot for their orders.

Prices on items are the same online as in stores. Each order must total at least $100, and there is an additional $10 pickup fee.

Related Link: Albertsons CEO: Changing Consumer Habits Are Positive For Grocer

Why It's Important: Costco is among the last major sellers of food to offer curbside options, although this was within the company's abilities. Costco is known for keeping costs as low as possible, and offering curbside pickup posed logistical problems in its parking lots.

Costco customers tend to also be more affluent, and in-store promotions like free samples were designed specifically to maximize sales.

Impulse purchases could decrease when orders are placed online as consumers are more likely to stick with only what they need to purchase.

It shouldn't come as much as a surprise that Costco is years behind its grocery rivals, as digital initiatives have never been part of its core DNA.

Walmart Inc WMT, as an example, started testing in-store pickup options in early 2014 and emphasized building out all aspects of digital business.

Walmart, unlike Costco, has been working on a grocery delivery initiative for years.

In April 2020, the company announced an Express Delivery option that promises delivery of groceries and other items to customer doors in less than two hours.

Costco only started testing same-day grocery delivery options via Instacart at Canadian stores in July 2020.

What's Next: Costco hasn't officially confirmed a pilot program of curbside pickup in a press release, although details are offered on its website.

COST Price Action: Costco shares were down 1.04% at $358.55 at last check Monday. 

Photo by Nandaro via Wiki Commons.