Dive Brief:

• Costco is piloting same-day grocery delivery through Uber from 25 Texas stores in Dallas, Austin and Houston, according to an announcement from the delivery firm.
• The deal marks Uber’s first test run with a U.S. food wholesaler. In the coming weeks, seven more Costco stores will begin offering delivery through the Uber and Uber Eats apps.
• The pilot adds another third-party provider to Costco’s same-day delivery lineup as Uber continues to integrate major grocers onto its platform.

Dive Insight:

Same-day delivery hasn’t been a priority in the past for Costco, which prefers to dazzle members with its in-store shopping experience. But with digital sales booming during the pandemic, the club retailer is weighing different ways to expand speedy online fulfillment.

Costco reported a 450% increase in same-day grocery delivery sales through Instacart during the second financial quarter, which the club retailer reported in March. In late May, Chief Financial Officer Richard Galanti said same-day online sales had tapered off from their peak during the height of the pandemic, but were “still huge relative to pre-pandemic,” according to an earnings call transcript. 

Costco currently offers a two-day shipping service for dry groceries in addition to its nationwide same-day service through Instacart. It’s also piloting pickup via Instacart at three club stores in New Mexico.

For Uber, the partnership with Costco adds another major company to the lineup of retailers listed under its popular main app and Uber Eats app. Earlier this week, Uber announced delivery service from 1,200 Albertsons stores, bringing its footprint to more than 400 U.S. cities and towns. 

Costco’s willingness to work with multiple delivery apps indicates it’s looking to broaden its reach, particularly with young consumers. The club retailer currently has more than 100 million members globally.

“Costco is a beloved brand across the United States that has become synonymous with quality and affordability,” Uber stated in its announcement Wednesday. “Their commitment to sourcing quality products to fuel households of all sizes — and businesses — make them an ideal partner for Uber's burgeoning grocery delivery efforts."