DALLAS — There are lots of grocery options, but no one does samples like Costco.
Costco Wholesale Corp. has long been known for offering some of the best free samples, both in quality and quantity, to create loyalty with customers and increase sales. Now it wants to lead grocery stores in being one of the first to restart taste testing in a safe way in June.
The update was revealed by Costco CFO Richard Galanti during the company’s latest earnings call Thursday afternoon after an analyst noted samples have become part of the Costco experience that customers love. The analyst asked Galanti if Costco had plans to bring them back.
“We are going to start doing some things in mid-June on a slow rollout basis in sampling,” Galanti answered. “I can’t tell you anymore but needless to say, (it’s) not going to be where you go and just pick up an open sample with your fingers.”
Costco stopped offering samples in early March after concerns were raised about the service at a time when people were first starting to minimize contact due to the coronavirus.
At first, the 30,000 employees from the contracting company that took care of Costco’s samples, San Diego-based Club Demonstrations Services, were reassigned to cleaning and sanitizing duties, according to a BuzzFeed News. But by late March, Costco ended its relationship with CDS. On April 6 — about a month after Costco ended samples — CDS shut down and laid off thousands of employees.
Costco, which is based is Issaquah, Wash., declined to comment further. Club Demonstration Services could not be reached to answer if its operations had restarted. However, its website lists 45 open positions for part-time brand ambassadors, whose duties include live featured product demonstrations. One of the open positions is in El Paso, which has a Costco.
Costco said Thursday that same-store sales were up 9.6% for the five-week period ended April 5 as shoppers loaded up on essentials like toilet paper and water. However, same-store sales were down 4.7% for the four weeks ended May 3 as stay-at-home orders and social distancing decreased foot traffic. Although sales increased, net income fell about 8% year-over-year to $838 million for the three-month period ended May 10 due to added COVID-19-related wage and sanitation costs.
Some shoppers may feel safer in Costco, which requires customers to wear a face covering, than in grocery stores because its large warehouse layout is better suited for social distancing, Galanti told investors.
“When you talk to people anecdotally, they feel frankly more comfortable coming into a Costco which is bigger, more wide open, with certainly the 6 feet apart that we’re all doing,” he said.
Costco’s confidence in reopening sample stations could cause other hesitant grocers to speed up plans to restart food demonstrations.
Sampling is a bigger part of the experience at Sam’s Club than Walmart. Sam’s Club hasn’t made a decision about re-upping its samples, said spokeswoman Amy Wyatt-Moore. Similarly, Walmart is still evaluating the situation, a spokeswoman said.
Market Street, which has 18 Texas locations, is running a pilot sampling project in June to test packaging and procedures, said spokeswoman Nancy Sharp. The process will comply with state and federal health and safety guidelines, she said.
“Like many things, providing samples will look very different moving forward than in a pre-COVID world,” Sharp said.
Dallas-based Central Market, a gourmet grocery chain owned by H-E-B, is exploring different options to bring sampling back in a safe manner, such as putting the food in individual serving cups with lids, individual bags, or blister packs, said Mabrie Jackson, director of public affairs for Central Market and H-E-B.
“Samples are huge for us,” she said. “Our stores are different because it’s really an experience. Samples are part of delighting the senses.”
Central Market’s foodie team misses the samples because they miss seeing customers, Jackson said. She said food demonstration stations helped the grocery chain develop a deep relationship with customers, who would stop to chat and enjoy a treat.
“We’re doing fine now — in a new normal,” she said. “But we’re also thinking about how to bring the full experience of our stores back while keeping people safe.”