Costco Expands Online Grocery Delivery With Shipt
App-based ordering is being tested in Florida, but the convenience of grocery shopping from home comes at a price.
As much as Costco loves to see its members crowd store aisles, the wholesale club also recognizes the lucrative potential of online shopping. After all, as Amazon.com has proven, some shoppers are willing to pay a premium to skip the lines and have orders delivered to their doorsteps. And as technology has put the power to order just about anything quite literally in the palm of every shopper's hand, Costco is trying to expand its reach by testing home delivery of groceries with a new partner called Shipt.
Shipt, which like Costco is membership based, now delivers the warehouse club's groceries, including perishables, in the Tampa, Fla., metro area. In an added boost, shoppers who are not members of Costco will still be able to shop for its groceries through Shipt.
Costco and Shipt are testing the partnership in a single market for now, but Shipt's geographic reach would allow the service to expand rapidly should the companies choose to do so. Shipt, which offers unlimited deliveries of groceries for $99 a year, currently services 17 million households in 35 markets. It aims to be in 50 markets with more than 30 million households by the end of the year. Tampa-area residents can try Shipt for free for two weeks and will get $15 off their first Costco order. Shoppers can download and place orders using the Shipt app after registering for the service.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
This isn't Costco's first foray into online grocery ordering and delivery. The partnership with Shipt complements Costco's existing relationship with Instacart, which delivers groceries from Costco in as little as one hour in 19 states and the District of Columbia, according to Instacart. You don't need to be a Costco member to use Instacart, but keep in mind that Instacart charges a delivery fee (it varies) and grocery prices won't necessarily be the same as you'd find in a Costco store.
Led by Amazon.com, the online grocery industry is growing by leaps and bounds. U.S. online grocery sales came to $7 billion in 2015 and are forecast to rise to $18 billion by 2020, according to Statista. On a global basis, online grocery shopping is forecast to account for 20% of all groceries sales by 2025, according to a report by market-researcher Nielsen. Much of this growth is being driven by digitally savvy millennials who are starting families of their own.
Costo Membership Fees on the Rise
In a separate development, Costco announced plans in early March to raise its membership fees. The warehouse club will increase annual membership fees by $5 to $60 in the United States and Canada for all its basic "Gold Star" individual and business memberships. Executive memberships in the U.S. and Canada will increase by $10 to $120. Overall, the fee increases will affect around 35 million members. The new fee structure will go into effect on June 1.
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.
A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.
Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.
In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more.
Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.
Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.
-
Is a Phased Retirement Right for You?
Want to keep working, just not as hard? A phased retirement may just be the answer.
By Kimberly Lankford Published
-
Four Tips to Make Your Sales Presentation a Winner
Being prepared and not being boring can go a long way toward persuading a potential customer to buy into what you’re offering.
By H. Dennis Beaver, Esq. Published
-
When Is Amazon Prime Day?
Amazon Prime In 2023 Amazon had two Prime Day events — one in July and another, called Big Deal Days, in October. We expect 2024 to follow the same schedule.
By Bob Niedt Last updated
-
Costco to Offer Outpatient Healthcare Services Starting at $29
Costco members willing to pay cash can get discount pricing on some outpatient services, including virtual primary care for $29.
By Joey Solitro Published
-
5 Ways to Save Money on Vacation Rental Properties
Travel Use these strategies to pay less for an apartment, condo or house when you travel.
By Cameron Huddleston Published
-
10 Annoying Hotel Fees and How to Avoid Them
Travel Here's how to avoid extra charges and make sure you don't get stuck paying for amenities that you don't use.
By Cameron Huddleston Last updated
-
Costco Photo: A Kirkland Signature Perk Gets the Boot
Costco already removed photo centers and services from its warehouses. Now, the online Costco Photo Center is being scuttled.
By Bob Niedt Published
-
Costco Deals Ripe for the Pillage in the “Treasure Hunt”
Costco You don’t have to be a pirate to go on this Treasure Hunt, where you can buy $55,000 diamond rings, $650 Wagyu filets or a $35 fur trapper hat. But hurry – supplies are limited (really).
By Bob Niedt Published
-
The Open Secret of Costco Shopping: Costco Next
Costco What is Costco Next? It’s a specialty shopping zone of Costco.com that has highly curated products at discounted prices.
By Bob Niedt Published
-
Latest Costco Perk: Pickup Lockers
Costco Costco’s lockers will let you buy some products without having to roam the aisles.. But don’t expect to use it to buy a generator, mattress, whole goat or other large item.
By Bob Niedt Published