Fall has a way of taking over the grocery aisle before the weather actually gets the memo.
While many of us may still be walking around in shorts and flip-flops, pumpkin spice is everywhere, from coffee to cereal to seemingly every dessert imaginable.
For retailers, the arrival of fall flavors has become an annual opportunity to turn seasonal cravings into sales. And now, Costco is getting in on the action.
But the warehouse club isn’t simply bringing back another familiar pumpkin dessert.
Instead, Costco has added a surprising new item to its fall lineup.
Costco is betting on more than the usual seasonal favorites
Longtime Costco members are familiar with the store’s famous pumpkin pie, which is back for fall. But Costco has also added a new Pumpkin Spice Bar Cake to its bakery lineup, giving members a fresh reason to make a trip to the dessert section just as pumpkin season gets underway.
The new cake weighs 2.5 pounds and serves roughly 20 slices, according to Delish.
It features layers of pumpkin spice sponge cake and pumpkin mousse topped with frosting and decorative detailing. Cinnamon and nutmeg help deliver the familiar fall flavor profile.
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At first, Costco’s new Pumpkin Spice Bar Cake may sound like a straightforward seasonal offering. But there’s a larger strategy at work here.
Costco has increasingly emphasized giving shoppers something beyond low prices. And the company’s executives have repeatedly pointed to merchandise quality, value, and the excitement of finding something new as important parts of the membership experience.
During Costco’s most recent earnings call, CFO Gary Millerchip put it plainly: “Our combination of merchandising quality, value, and newness continues to resonate with members.”
That helps explain why Costco’s membership renewal rate is over 92% across the U.S. and Canada.
Specifically, during Costco’s most recent quarter, the company reported that fresh comparable sales increased in the high single digits, with meat and bakery leading the category.
“In bakery, we continue to see success with the launch of exciting new items including a variety of seasonal pastries and cookies,” Millerchip said.
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It’s all about the treasure hunt
Costco’s latest bakery offering is a prime example of the company’s treasure hunt style shopping experience that’s long given it a leg up over Sam’s Club, its biggest rival.
Of course, Costco members can easily get enthusiastic about a variety of new products. But when you take a product like pumpkin, which consumers tend to go gaga over from the start, it can be a huge draw.
Early shopper reactions suggest the Pumpkin Spice Bar Cake is already a hit. Shoppers are calling it “amazing” and “perfect for cozy weather,” according to Delish.
For Costco, that kind of response is potentially more valuable than simply selling another pumpkin-flavored dessert.
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Seasonal merchandise gives retailers a limited window to create urgency. Members know the item may not stick around forever, which can encourage them to come in and buy it while it’s still there.
By encouraging more fall visits, Costco is doing its part to boost revenue on a whole.
Members who come in to check out the latest fall-inspired cake might leave with not just a new dessert in their carts, but more items overall. And that’s the real win for Costco.
Maurie Backman owns shares of Costco.
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