Costco Had A Record-Breaking 2021
As the new calendar year dawned upon us in 2021, hopes were high for a less "tumultuous" time. As it turned out, that wasn't the case but the world has continued to spin on amid the ongoing COVID-19 pandemic and the related and unrelated economic instability, political unrest, and general cultural dissension. But 2021 has, by no means, been a universal fail. Just as the fast food industry noticeably benefitted from pandemic-related lockdown culture in 2020, the supermarket industry has also seen growth in 2021 (via Statista). There are a myriad of examples, but none more stunning than the case of Costco, which closed out 2021 in record-breaking style, per Costco Investor Relations. And even more impressive, the grocery warehouse continues to enjoy sunny sales and stock growth, even amid such annoyances as supply chain issues and inflation.
On December 9, Costco issued a press release regarding its first financial quarter of 2022, which actually ended November 21. Net sales for the quarter had increased to $49.42 billion from $42.35 billion last year, the release stated, representing an increase of 16.7%. The next day, Investors Business Daily reported that, in the wake of this "better-than-expected" news regarding Costco's profit and revenues, the price of Costco stock had risen by 6.6%. As well, through late November, the company's stock had been trading at numbers 48% higher than the year prior. Suffice to say, it's been quite the banner year for Costco — here's how they parlayed the challenges they faced into dollar signs.
Costco's record-breaking year benefitted many
Costco had a record-breaking 2021, and it managed to do so all while still thinking of its workers and the communities it serves. First, the warehouse supermarket giant raised its minimum wage, not once, but twice. The first took it to $16 and the second, in October, brought the minimum to $17 (via CNN). In September, its Chief Financial Officer, Richard Galanti, also announced that the chain plans to open another 25 locations throughout the next year (via Motley Fool). Earlier in the year, Costco even formed a partnership with Uber for a pilot program in the state of Texas in which certain locations would provide almost immediate delivery service through the third-party app — according to an Uber press release.
Some of Costco's financial successes over this past year did require raising prices in order to distribute the burden of "increased freight costs, higher labor costs, rising demand for transportation and products, higher commodity prices, and shortages in computer chips, oils, and chemicals" (per AOL Finance). Nevertheless, its membership renewal rate is 91.6% in key U.S. markets, according to Motley Fool, which suggests shoppers will be keen to return.