Costco Just Announced a Major U.S. Expansion With 10 New Warehouses In 2023
Costco is about to reach an important milestone. The warehouse giant already far exceeds its main rival, Sam's Club, in annual sales. Now, it's on pace to match its competitor's slight edge in store count, too.
During Costco's latest earnings call on Tuesday, chief financial officer Richard Galanti said the retailer planned to open 10 new warehouses over the next 12 weeks. Nine of those new stores will be located in the United States, with another in Canada. Costco also plans to relocate one existing store to a newer building. That's a total of 11 newly constructed warehouses across North America by year's end.
The popular retailer aims to step up its expansion plans even more in 2024. Costco added 23 new warehouses worldwide over the past year, plus three relocations. Galanti said it's on track for new stores in the "mid to high 20s" over the next fiscal year. Most of those new buildings will be in the U.S., he added.
"We're finding more opportunities in the U.S. to infill, given our high volumes," Galanti said. "And we've got plenty going on over the years overseas."
The Issaquah, Wash.-based company currently operates 861 warehouses around the world, including 591 locations in the United States and Puerto Rico—slightly less than Sam's Club's 600 domestic stores. But, if everything proceeds as planned, Costco will match Sam's footprint within the next three months.
Walmart-owned Sam's Club hasn't opened a new store since 2017. Last January, the competing warehouse club announced plans to open 30 more U.S. stores over five years, with the first new opening coming up in 2024.
Costco's own long-range plans seem even more ambitious. Galanti said the company could add "easily another 150" stores in the U.S. alone over the next 10 years, based on results that have surpassed even its own lofty expectations.
"We're finding more opportunities here and it's evidenced by just the sheer volumes that our units are doing today," he said. "It's much higher than we would have expected three or four years ago. So, we think that there's still a lot of runway in that regard."
Costco reported $77.43 billion in net sales over the last quarter, driven mainly by the strength of its food and sundries business. According to CNBC, Costco generated net sales of $222.7 billion in 2022—effectively tripling Sam's Club's $73.6 billion.
Costco is scheduled to open three new warehouses next month, including two locations in California and one in Montana, followed by another seven planned openings in November, according to the company's website. Additionally, the retailer plans to open new business centers in Alaska, Michigan, and Missouri. Costco's next international opening is set for January in Shenzhen, China.