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  • Jeffrey Goldfarb

Costco Delivery

Costco | Amazon | Internet | Buffalo, NY | Certified B Corp 

While monopolies are seen as competition killers in some instances, aggressive moves by large companies can also spur competition that benefit the consumers. When Amazon closed on its deal to buy Whole Foods over the Summer, many saw this as the beginning for the end for grocery stores as we know it.[1] Amazon is not only one of the largest companies in the world, but has also been one of the fastest growing, and its purchase of a large franchise like Whole Foods further demonstrated its ambition to be involved in almost every part of a consumer’s life.

When a company like Amazon enters the market, companies have two options. Either embrace the inevitable expansion, because a company like Amazon will not remain dormant once it has a foothold, or fight back. The latter not only offers a chance for survival, but also benefits the consumer.

Costco, previously cautious with online expansion has decided to take the leap. The wholesale market known for in-bulk products at reduced prices is now offering home delivery services for online purchases.[2]

The grocer is now using same-day and two-day delivery options on its website.[3] The latter for shelved food, while same day delivery will be for perishable goods through a partnership with Instacart.[4] The delivery service will offer “free shipping on around 500 producs for orders at least $75.”[5]

Costco has fought embracing e-commerce because it’s warehouse layout prefers in person shopping, however Amazon’s entrance into the market and immediate success has forced Costco’s hand to finally embrace online shopping and delivery.

This is what competition does, it forces larger companies to make decisions that appeal to consumers so they can maintain their customer base. In the coming months it will be interesting to see what Amazon and its food competitors will do to attract new customers from one another, but as long as the competition is alive the right people will be the ones benefiting: The Customers.


Raymond James is not affiliated with and does not endorse the entities mentioned above. All opinions expressed are those of the author and not necessarily those of Raymond James. Opinions expressed are as of this date and subject to change without notice at any time. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. The information provided is for informational purposes only and is not a solicitation to buy or sell any of the above mentioned companies. Jeffrey Goldfarb, Raymond James Financial Services, Inc., its affiliates, officers, directors or branch offices may in the normal course of business have a position in any securities mentioned in this report.

[1] https://www.cnbc.com/2017/08/24/amazon-says-whole-foods-deal-will-close-monday-prime-customers-to-immediately-get-discounts.html

[2] https://www.wsj.com/articles/costco-with-an-eye-on-amazon-expands-home-delivery-service-1507284001?mg=prod/accounts-wsj

[3] https://www.bizjournals.com/seattle/news/2017/10/05/costco-grocery-delivery-instacart-same-day-two-day.html

[4] https://www.seattletimes.com/business/retail/costco-expands-delivery-of-online-orders-includes-fresh-groceries/

[5] https://www.wsj.com/articles/costco-with-an-eye-on-amazon-expands-home-delivery-service-1507284001?mg=prod/accounts-wsj

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