Costco, home of cheap hot dogs and unreasonably large buckets of mayonnaise, has found a new niche: fresh food and, along with it, fresh customers. In an earnings report today, the company said sales of fruits, vegetables, and other perishables increased, in percentage terms, in “the high single digits.” Overall, it reported profit growth of 13 percent, making this its best quarter since May 2013.
The company has been stocking all that produce to lure younger consumers, a strategy it revealed in the spring. Chief Financial Officer Richard Galanti crowed about the hefty margins on new organic fare, including “giant bags” of kale. “That competitively gives us a leg up,” Galanti said on a conference call this morning.