Costco calls scan-and-go pilot ‘extremely successful’

Costco is piloting scan-and-go technology and opening new warehouses to alleviate overcrowding and improve the member experience, according to CEO Ron Vachris. These efforts follow a strong Q3 2025, with net sales up 8% to nearly $62 billion and U.S. comparable sales increasing 6.6%, driven by rising traffic and digital investments like personalized product recommendations and a buy now, pay later partnership with Affirm; digital sales now account for approximately 12% of total sales.

Analysis

Costco is actively addressing its high store traffic challenges through strategic initiatives aimed at enhancing the member experience. The company reported a successful pilot of scan-and-go technology during its Q3 2025 earnings call, which, alongside plans to open 27 new warehouses by year-end (with approximately 80% of Q4 openings intended to cannibalize high-volume locations), aims to reduce checkout times and alleviate store crowding. These operational improvements are complemented by strong financial performance, with Costco reporting an 8% year-over-year increase in net sales to nearly $62 billion and a 6.6% rise in U.S. comparable sales for Q3 2025, surpassing expectations despite tariff concerns. Customer traffic also saw robust growth, increasing 5.2% worldwide and 5.5% in the U.S. year-over-year. Furthermore, Costco is making significant strides in its digital transformation, evidenced by a partnership with Affirm for buy now, pay later options, the launch of a personalized product recommendation hub, and the fact that over half its members have downloaded the Costco app. These digital efforts contributed to digital sales (excluding gas) accounting for approximately 12% of total sales, and the company noted increased online sales of big and bulky items, supported by investments in Costco Logistics.

Key Decisions for Investors

• Investors should consider Costco's proactive approach to managing high customer volume through technological innovations like scan-and-go and strategic new warehouse openings, which could sustain customer satisfaction and support long-term growth.
• The reported 8% net sales growth and 6.6% U.S. comparable sales increase in Q3 2025, alongside rising customer traffic, indicate continued strong consumer demand, warranting attention to how these trends persist in subsequent quarters.
• Monitor the progress of Costco's digital initiatives, including the Affirm partnership and app engagement, as the ~12% contribution of digital sales to total revenue suggests a growing and significant channel for future expansion and member value.