Costco EVP and CFO Richard Galanti Discusses E-Commerce Push, Growing Fulfillment
ISSAQUAH, WA - Costco has been wading into the warming waters of online grocery retail, and now it seems like the club retailer may be taking the plunge—putting the weight of its dollars and its distribution network behind a bigger push into Amazon- and Walmart- dominated omnichannel territory.
In a Retail Info Systems (RIS) report, Richard Galanti, EVP and CFO, detailed the company’s strategy and expectations.
“We did go and spend hundreds [of thousands], if not $1 billion dollars around delivery,” noted Richard Galanti, EVP and CFO. “We’re doing it actually as a partner of UPS, limiting the things that we do, and it seems to be working.”
According to that report, two-day delivery is now available to Costco members throughout the continental U.S.—and same-day delivery is currently available to members within 20 minutes of 99 percent of all the company’s U.S. locations. And the company has plans to expand its delivery-available option.
“My guess is there are going to be some things that we're currently doing third-party that we will bring in-house as we get better and more confident in being able to do it,” continued Galanti, who also touched on the company’s efforts to expand its distribution channels. “In terms of warehouse expansion, we've opened eight locations, including two relos, so a net of six in the first quarter…For all of '19, we expect to open 20—about 23 net new warehouses, as well as four relocations. The two we've opened plus two more planned for the rest of the year. Within the 23 net new, about three quarters of them are in the U.S. and about a quarter of them are international.”
To learn more, read RIS’s report in its entirety here.