Here's How Tariffs Will Affect Costco's Prices, According to the Company's CEO Costco CEO Ron Vachris said that one-third of U.S. sales are imported from other countries.
By Erin Davis
Key Takeaways
- Costco has been negotiating with suppliers to cut prices to offset President Trump's tariffs.
- CEO Ron Vachris said that the company plans to "minimize the impact of related cost increases to our members."
- UBS analyst Michael Lasser said that Costco and Walmart are expected to have "the most resilient earnings outlook."
As business leaders continue to watch how tariffs will affect everything from markets to mortgage rates, Costco's CEO says the company doesn't plan to raise prices (much) or make dramatic changes.
On the company's second-quarter earnings call last month, CEO Ron Vachris said that Costco will be able to keep prices low and "rise to this challenge by leveraging our global buying power, strong supplier relationships, and innovation."
"As we look ahead to the remainder of this fiscal year, headwinds from foreign exchange look likely to continue," Vachris said. "[It is] difficult to predict the impact of tariffs, but our team remains agile, and our goal will be to minimize the impact of related cost increases to our members."
Related: Costco Bulks Up Most Store Workers' Paychecks to More Than $30 an Hour. Here's Why.
Costco is used to being creative when times are uncertain. In September 2021, the company privately rented at least three container ships and "several thousand" containers when supply chains were in flux so that the warehouse chain could skirt the global shipping crisis.
"About a third of our sales in the U.S. are imported from other countries, and less than half of those are items coming from China, Mexico, and Canada," Vachris said.
Similarly, Walmart says two-thirds of its goods sold in the U.S. are domestically produced, assembled, or grown. UBS analyst Michael Lasser said that Costco and Walmart are expected to have "the most resilient earnings outlook" with the new tariffs, per Yahoo Finance.
Meanwhile, Costco CFO Gary Millerchip said the current state of the company has shoppers "focused now on quality, value, and newness."
And while members are still spending, they're being more purposeful in their purchases.
Millerchip said members may "even become more choiceful as the impact of some return of inflation and the potential impact of tariffs could flow through as well."
Costco is one of the largest retailers in the world with nearly 900 stores worldwide and $250 billion in sales in 2024.
