Costco Real Same Store Sales Negative
Costco reported that its domestic same store sales was up 9%. Adjusting for a 40% increase in gas prices, the company reported sales were up only 6%.
As an aside, I am an avid Costco fan. I think Costco is the best retailer in the world with a fantastic group of buyers. That said, go visit a Costco and for $1.50 you can get a great dog and a Coke at the end of the cashiers. I suggest load it up with onions and spicy mustard.
Go buy one and just sit there and watch the people go buy with carts. Last year the carts were a mix of stuff and food. This year, I have noticed that practically every cart is food only. It appears Costco is becoming more of a grocery store versus general merchandise. You can also see this in the increased allocation of floor space to groceries.
That said, we know that food prices have skyrocketed in the past six months. With a higher percentage of revenues coming from food, is there little doubt that adjusting same store sales in the same way the company did for gas, sales would have been negative.
When Costco's inflation adjusted same store sales are negative...you know we have serious problems.
As revenues continue to contract debt will continue to default. Since debt is by far and away the largest asset class in America, and equity is simply any value above debt.......anyone think we are about to fall off a cliff?