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Placer Bytes: Costco's Outlook, Burlington's Potential and Ulta

Ethan Chernofsky
May 25, 2020
Placer Bytes: Costco's Outlook, Burlington's Potential and Ulta

In this Placer Bytes we dive into Costco’s performance and what changes to consumer behavior could mean for the coming months. Then we take a look at two of retail’s strongest pre-COVID performers to get a sense of how they could rebound.

Costco’s Silver Lining

Costco has been among the most consistent performers in retail over recent years with a seemingly unstoppable ability to produce strong visit numbers. And 2020 kicked off with the same momentum with January visits rising 2.6% year-over-year and February visits spiking to 10.5% year-over-year growth. The latter peak was pushed heavily by the surge in wholesale traffic as pandemic concerns began to spread nationwide. 

However, the inevitable downturn began in March, where a huge start to the month was quickly followed by significant decreases, driven heavily by Costco’s self-imposing restrictions on visit numbers and times. This led to March visits dropping 0.8% year over year before visits bottomed out at 28.2% declines year-over-year in April.

But the outlook isn’t all bad. Compared to the same period in 2019, March through May 2020 visits showed a 4.7% increase in visit duration. This is a significant metric that indicates the potential for a larger basket size even as visits declined. Additionally, certain changes to customer behavior could benefit Costco in the longer run. Because the store tends to have a higher visit duration than other grocers, the flexibility of when and where to work could boost visits. Costco did see Monday through Thursday visits rise from 47.9% of visitors to 56.0% during the period. 

The next element driving the optimist’s case for Costco is that visits are indeed back on the rise. Visits were up week over week by 2.3% the week of May 4th through 10th, and this is all before the removal of restrictions on visitors that was announced May 15th. So yes, visits are down. But they were obviously going to be down considering all the measures the brand self-imposed. 

The real question is how quickly can ‘normal’ visits return. And here is the final piece of the equation. The combination of the membership club model, the opening up of other in-store resources, and the positioning for a time of recession all work in Costco’s favor. A high-value offering, along with a membership model that incentivizes loyalty, the return of revenue channels, and longer visit duration, could actually mean that the coming months may set the brand up for new heights.

Burlington’s Future Potential Coming Into Focus

Pre-COVID, Burlington made the decision to double down on offline and close their eCommerce offering. At the time, there was a clear rationale behind the decision, and while the complete shuttering of offline apparel retail may have caused doubt, there are still reasons to believe that Burlington could bounce back strongly.

To begin, the brand was on an offline tear pre-pandemic. Visits in January 2020 were up 12.2% year over year only to be surpassed by February visits that were up 16.7%. March visits then began the difficult period with an 11.0% year-over-year decrease before April saw visits come to a standstill. 

While the pre-COVID period showed promise, the post-COVID period could be even more interesting. With the wider off-price sector well positioned for the coming economic certainty, Burlington could also see its value offering benefit in the coming months. Also, like other players in the space, it could see benefits from the financial struggles of key competitors like JC Penney. 37.4% of Burlington’s audience shopped at a JC Penney over the measured period meaning closures could drive more visits to Burlington. So even with COVID-19 putting a block on its visit surge, the future still may be bright.


One of our favorite brands heading into the year, Ulta has a similarly fascinating question to answer. Visits in January and February 2020 were up 9.6% and 14.6% year over year respectively before they obviously plunged in March and April.

With stores already beginning to open mid-May, one key concern centers around their ability to thrive without the ‘touch and feel’ experience brought to the forefront by their samples. Removing this could provide a limitation, but as stores open, the ability to recreate their pre-COVID excitement will be critical to watch.

Can these three brands, who were each riding so high pre-pandemic, retain their early 2020 momentum?

Visit to find out.

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