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Costco considering auto-replenishment, other new e-commerce options

After debuting two grocery delivery services earlier this year, Costco Wholesale Corp. is considering more potential e-commerce offerings, including one that would allow customers to sign up for regular shipments of certain products.

Executive Vice President and Director Richard Galanti told analysts during a call to discuss fiscal first-quarter earnings on Dec. 14 that Costco is considering the service, but declined to comment on whether the company had specific plans to start offering the service.

"We're looking at that and some other things," he told analysts during the call.

Amazon.com Inc. already offers auto-replenishment for consumer goods such as soap and vitamins through its Amazon Dash Replenishment service, according to the company's website.

If Costco eventually offers the option, it would follow its recent introduction of two grocery delivery services: One that mails dry goods to customers and another through delivery startup Instacart. Galanti discussed both for the first time during a call with analysts in October.

The company disclosed little new information about its grocery delivery offerings during the Dec. 14 call. Asked by analysts about the two services, Galanti said the retailer's management is pleased with initial results but declined to provide specific figures about sales made through either service.

For the first quarter ending Nov. 26, total e-commerce sales rose 42.1% over the year-ago period, excluding the impacts of foreign currencies and gas inflation. The grocery delivery services made a small contribution to that increase, Galanti told analysts, adding that Costco is holding off on marketing them extensively until it fine-tunes the new operations.

"We're trying to make sure that we don't screw it up," he told analysts.