Warehouse giant Costco continues to prosper despite the growth of internet retailing.
TAKING ON AMAZON.COM (SYMBOL AMZN) seems foolhardy these days. The company is expanding so fast that it could gobble up more than half of online retail sales in the U.S. by 2021, up from one-third in 2016, according to brokerage firm Needham & Co. Yet even with Amazon raking in sales, some big retail chains are flourishing. One of the most successful is COSTCO WHOLESALE (COST). Appealing to millennials and baby boomers alike, the warehouse club has homed in on a surprisingly effective way to keep Amazon at bay: selling food.
Although Costco’s lineup spans everything from jewelry to appliances, more than 80% of its members go specifically for the groceries, according to a recent survey by investment firm Barclays. Customers pile in to buy household goods in bulk, at prices that are tough to beat online. Costco also sells fresh meats, produce and baked goods.
Add it all up and the warehouse club’s “mousetrap” looks well protected against Amazon, Barclays says.
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