Costco announces grocery delivery

Costco Wholesale, which has long thrived on offering free samples, is giving its customers fewer reasons to come into its stores.

The company announced Thursday that it is rolling out two new grocery delivery services that would bring fresh produce, as well as packaged goods and other items, straight to customers’ doorsteps.

The move brings the membership-based chain face-to-face with some of its largest competitors, including Amazon.com, which recently completed its $13.6 billion purchase of Whole Foods Market, and Walmart, the country’s largest grocer. (Jeffrey P. Bezos, the founder and chief executive of Amazon, owns The Washington Post.)

But some analysts worried that Costco — which has been successful at getting people to make impulse purchases at stores — may lose its edge if fewer shoppers are roaming its aisles. Shares of the company’s stock closed down 5.97 percent at $157.09 on Friday.

“The concern, generally, has been: If they are successful at delivery, does that take away business from the club?” asked Scott Mushkin, an analyst for Wolfe Research. “The magic of Costco has always been its merchandising acumen: You go in to pick up Tide or toilet paper, and you walk out with Henckels knives.”

Some of those opportunities, he said, may be lost if customers are placing online orders instead of browsing in-store. And since there tends to be overlap between customers who use both Amazon Prime (which costs $99 a year) and Costco (where annual membership starts at $60), there is a risk of shoppers dropping one in favor of the other.

But, he added, those concerns could be overblown.

“Investors have become worrywarts when it comes to Costco,” he said. “But look at their numbers: Great traffic, huge sales growth. These are big numbers for a big company.”

Costco said Thursday that sales had grown 16 percent to $41.4 billion in the most recent quarter, up from $35.7 billion a year earlier. Same-store sales, a measure of sales in stores open more than a year, rose 5.7 percent, while profits rose 18 percent.

The company’s new programs include Costco Delivery, which offers two-day delivery on nonperishable foods, as well as an extended partnership with Instacart, a service that offers same-day groceries. Delivery is free on orders over $75.