- Costco’s free food sample stations are set to begin returning in June, according to CFO Richard Galanti.
- In Thursday’s earnings call, Galanti spoke to analysts about how the coronavirus pandemic has affected the warehouse club’s latest quarterly earnings.
- Galanti said that the chain will be issuing new rules regarding sampling, saying that members will not longer be able to “just pick up an open sample with your fingers.”
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The coronavirus pandemic has effectively put a halt to a quintessential Costco experience: snagging free food samples.
But Costco CFO Richard Galanti told analysts on a Thursday earnings call that the chain’s food sampling stations will begin returning in some capacity in June. In response to a question from Barclays managing director Karen Short, Galanti said the chain will instate new sanitary rules regarding samples.
“We’re going to start doing some things in mid-June on a slow rollout basis in sampling,” he told analysts. “I can’t tell you any more, but it’s — needless to say — not going to be where you go and just pick up an open sample with your fingers.”
The coronavirus has proved catastrophic for sample servers working in the warehouse chain. Many Costco sample servers work for Club Demonstration Services, a third-party product demonstration company. The company temporarily shuttered on April 6, resulting in layoffs affecting thousands of sample servers working at Costco.
And free samples aren’t the only aspect of Costco food culture that has been negatively impacted by the coronavirus pandemic. As a result of the virus, Costco food courts have been operating with a “limited menu.” In an announcement posted on Costco’s website on May 4, the retailer said that its food courts would only be fulfilling takeout orders. Galanti said that “a good portion of our food court item offerings were eliminated for Q3.”
“We’ve added some but not all the items back by now,” Galanti said.
Costco did not immediately respond to Business Insider’s request for comment. It is unclear what menu items are being dropped, and what the new rules regarding food samples will be. Galanti said that the chain’s warehouses are still enforcing “social distancing and sanitizing,” and noted that many food courts have been “closed or mitigated during the majority of the quarter.”
In an earnings statement published on its website, Costco announced that “April sales were negatively impacted by COVID-19,” due to stay-at-home and social distancing orders dampening sales. The retailer said “limited service” in the warehouse chain’s food court helped squash April sales, along with gasoline price deflation and closures of Costco’s optical and photo departments.
Costco reported comparable sales of -4.7% for the entire company but noted that comparable sales “excluding gasoline, optical, travel, food court, hearing aids, photo, and foreign exchange” would have been 8.6%. According to its 2019 annual financial statement, Costco considers those operations as “ancillary businesses” meant to “provide expanded products and services, encouraging members to shop more frequently.”