Costco: another retailer investors are fleeing
It's been a bad year for retailers, as investors have been dumping the entire sector (except Amazon). With consumers continuing to move their shopping online, the latest victim is bulk retailer Costco, whose shares fell by nearly 6% by Friday afternoon, making it the worst performing stock of the day in the S&P 500.
Why investors have soured on the company: Costco announced shrinking profit margins, combined with a plan to begin a grocery delivery service, which may end up cannibalizing more profitable in-store sales. The news seems to have served as an admission to investors that Costco—which as a bulk retailer was thought to be immune to online competition—is feeling the heat from Amazon and Walmart's stepped-up e commerce division.