Costco's Traffic Growth Signals Strong Member Engagement Trends

Costco Wholesale Corporation COST continues to demonstrate exceptional member engagement, as evidenced by its first-quarter fiscal 2026 results. Comparable traffic, or shopping frequency, rose 3.1% worldwide during the quarter, with the average transaction, or ticket, up 3.2%. This consistent growth in warehouse visits underscores Costco’s value proposition and member engagement. In the United States, traffic increased 2.6%, while Canada and Other International locations registered shopping frequency of 5% and 3.1%, respectively.

This high level of engagement reflects several operational initiatives. The implementation of scanning memberships at warehouse entries and pre-scanning of small to medium-sized baskets has improved the member experience by increasing checkout productivity by up to 20% in some locations. The Costco Digital Wallet is another step in this direction. Costco is leveraging technology to remove friction and make shopping trips more convenient for its 145.9 million cardholders.

Member engagement is also being bolstered by digital enhancements that led to a 24% increase in e-commerce site traffic and a more than 40% jump in app traffic. Tools, such as AI-driven pharmacy inventory management and personalized website recommendations, are further strengthening the member bond. We note that digitally enabled comparable sales climbed 20.5%, supporting the view that digital engagement complements warehouse traffic.

With paid memberships growing 5.2% to 81.4 million and executive memberships increasing 9.1% to 39.7 million in the quarter, the upward trajectory of traffic confirms that the membership model remains highly effective despite a minor 10-basis-point sequential dip in the worldwide renewal rate of 89.7% due to a growing mix of digital sign-ups.

Trends at Walmart & BJ’s Wholesale

Walmart Inc. WMT U.S. reported comparable sales, excluding fuel, growth of 4.5%, supported by transaction growth of 1.8% and an average ticket increase of 2.7% in the third quarter of fiscal 2026. This mix suggests that Walmart is benefiting from both higher visit frequency and modestly higher spend per trip. At Sam’s Club U.S., Walmart reported comparable sales, excluding fuel, growth of 3.8%, driven by transaction growth of 3.9%, while the average ticket declined slightly by 0.1%. 

BJ’s Wholesale Club Holding, Inc. BJ continues to show encouraging traffic momentum, reinforcing the broader strength of the warehouse club model. In the third quarter of fiscal 2025, BJ’s Wholesale delivered its 15th consecutive quarter of traffic growth and 12th straight quarter of market share gains, underscoring consistent member engagement. BJ’s Wholesale also noted that digitally enabled comparable sales grew 30% year over year, suggesting that omnichannel convenience is reinforcing in-club traffic rather than cannibalizing it.

What the Latest Metrics Say About Costco

Costco stock has declined 5.3% over the past year against the industry’s growth of 6.4%.
 

From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 41.95, higher than the industry’s ratio of 29.91. COST carries a Value Score of D.
 

The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 7.5% and 11.7%, respectively. 
 

Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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