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Costco is finally testing out curbside pickup for groceries

Curbside pickup is being tested at select Costco locations for orders of at least $100.
Image: Shoppers Stock Up For Christmas
Costco is testing curbside pickup at a trio of locations in New Mexico.Courtesy Anthony Devlin / Getty Images
/ Source: TODAY

Costco has decided to test the waters when it comes to offering a service that has become a staple of several large retailers and grocery chains during the pandemic.

The company shared on its website that it testing out curbside pickup for members at three locations in Albuquerque, New Mexico, for orders of at least $100.

There is also a $10 pickup fee because the company says on its website that curbside pickup adds "an additional expense" to the Costco business model and "limited markup structure."

Costco employees will prepare the orders and deliver them to members' vehicles, and the prices of the items are the same as they would be while shopping in the store.

All groceries are eligible for curbside pickup as well as certain non-food items, with 2,000 items in all being available, according to the company.

Members can select a one-hour pickup window to get their items delivered curbside, and the locations will have dedicated parking spaces at each warehouse for pickup. Instructions are sent to the member about where to park, how to check in and when the order will be ready.

"We're testing it on a limited basis in one market at this time," Costco told TODAY in a statement.

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Costco has not previously offered curbside pickup for groceries — only a few select expensive items like electronics.

The test at the New Mexico locations comes as curbside pickup has become a popular option for customers who don't want to enter the stores due to COVID-19 concerns.

Many of Costco's competitors, like Sam's Club, Target, Whole Foods, Kroger and Walmart, offer same-day pickup at locations nationwide. Kroger, Whole Foods and Walmart also offer it for a lower minimum purchase of $35 per order.

One holdout alongside Costco has been Trader Joe's, whose executives outlined last year why they do not offer curbside pickup.

"Creating an online shopping system for curbside pickup or the infrastructure for delivery, it's a massive undertaking," Matt Sloan, the company's vice president of marketing, said on the company's podcast in April. "It's something that takes months or years to plan, build and implement and it requires tremendous resources.

"At Trader Joe's, the reality is that over the last couple of decades we've invested those resources in our people rather than build an infrastructure that eliminates the need for people."

Costco chief financial officer Richard Galanti shared a similar sentiment on an earnings call in September.

“We don’t have our head in the sand on it, we look at it, we have people here who study it, maybe we’ll surprise you one day but at this juncture, we are not prepared to do that,” Galanti said on the call.