Advertisement
spending

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.

Advertisement - Article continues below

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.

Advertisement
Advertisement - Article continues below

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.

Advertisement - Article continues below

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.

Advertisement

Most Popular

What Are the Income Tax Brackets for 2020 vs. 2019?
tax brackets

What Are the Income Tax Brackets for 2020 vs. 2019?

The IRS unveiled the 2020 tax brackets, and it's never too early to start planning to minimize your future tax bill.
June 20, 2020
65 Best Dividend Stocks You Can Count On
stocks

65 Best Dividend Stocks You Can Count On

These 65 Dividend Aristocrats are an elite group of dividend stocks that have reliably increased their annual payouts every year for at least a quarte…
July 8, 2020
Tax Changes and Key Amounts for the 2020 Tax Year
tax law

Tax Changes and Key Amounts for the 2020 Tax Year

Americans are facing a long list of tax changes for the 2020 tax year...and it's never too early to start thinking about next year's return.
June 22, 2020

Recommended

Sales Tax Holidays in 2020
state tax

Sales Tax Holidays in 2020

Sixteen states are having sales tax holidays this year. If you plan your shopping around these tax-free periods, you can save big on back-to-school cl…
July 1, 2020
For Financially Responsible Kids, Do NOT Do These 3 Things
family savings

For Financially Responsible Kids, Do NOT Do These 3 Things

The key to putting your kids on the right financial path can be boiled down into one sentence.
July 1, 2020
10 Tax Breaks for the Middle Class
tax deductions

10 Tax Breaks for the Middle Class

Tax breaks aren't just for the rich. There are plenty of them that are only available to middle- and low-income Americans.
June 30, 2020
Resources for alternative forms of transportation needed by many older adults
retirement

Resources for alternative forms of transportation needed by many older adults

For many older adults, having an alternative mode of transportation may be the difference between independence and social isolation.
June 29, 2020