NutriSystem inks deal to sell at Costco

NutriSystem Inc. (NASDAQ: NTRI) has worked out a deal to have its weight-loss products sold at Costco (NYSE: COST) stores. Until now, Nutrisystem products had been sold almost exclusively through the company's website and TV commercials.

NutriSystem's Senior Vice President of Business Development Will Auchincloss said that "We see Costco as a great partner during these tough economic times, and are excited to leverage our direct to consumer model in the retail channel with Costco. Through their gift card program, Costco will allow us to expand our existing customer base in the retail channel and capitalize on our strong consumer brand."

I'm not so sure how exciting this is: Nutrisystem has grown rapidly over the past few years with a strong marketing campaign and non-traditional distribution model. It's not like this is the first time that it's occurred to them that they could partner with retailers so the question is: Why now?

The deal with Costco isn't completely outside of NutriSystem's model, as the food will still be delivered by mail. So far investors appear to be shrugging it off.