Costco’s UK sales rose by 7.9% to almost £2bn in its last financial year as new warehouse openings underpinned its wider growth.

Costco UK’s turnover for the year to 30 August rose 7.9% to £1.95bn from £1.8bn in the previous financial year, according to its accounts filed at Companies House.

The wholesaler said around half of this sales growth came from two new warehouses – one opened during the prior period in Hayes and a new warehouse opened in August 2015 in Sunbury.

Costco said membership sales also “remained strong”, helped by the introduction of online renewals and various marketing initiatives.

E-Commerce contributed £16.8m of annual sales growth.

“The main drivers of sales growth were our core food and sunrise departments, with tobacco, grocery, confectionery and sundries sales being particularly strong,” the group stated in its annual accounts.

It did note that, as a result of the growth of Costco Online UK, it saw a decline in sales from warehouses major electronic equipment including televisions, cameras and tablets.

Full-year pre-tax profits dipped from £17.5m to £16.9m, though Costco said this was largely due to a favourable foreign exchange conversion gain arising from the repayment of a dollar-denominated loan in the previous financial period.

Gross profit rose from £48.5m to £57.6m, which helped operating profit rise from £14m to £16.6m.

Costco said the increase in gross profit “reflects a successful opening at Hayes as well as successful turnarounds at some of the historically underperforming locations”.

It pledged to continue adding warehouses in the UK, targeting one to two openings per year. “It is the company’s objective to open additional warehouses in the UK market, which the directors believe has a potential of approximately 35 to 40 locations”, it stated.

Costco’s website currently lists 25 warehouse locations.

However, it warned: “The marketplace continued to be very competitive during the period, whereby cash and carry wholesalers, major supermarket chains, hard discounters and multiple general retailers continually offered deep discounts on a variety of products to entice and retain customers and gain market share.”

Despite these pressure and “the weak global economic climate” its annual accounts also said it had experience a “strong improvement” in sales in the first quarter ended 22 November of its 2015/16 financial year.

It said this was driven by promotional offers and its core customers seeking value. “Good” levels of growth were seen it core food & sundries, fresh food and non-food, while e-commerce showed “strong growth” during the quarter.

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