The company’s strategy is to try to avoid raising its prices in order to retain the trust of its customers.
Although inflation continues to hit hard in the pockets of the vast majority of the population in the United States, some companies are trying to withstand the increases generated by logistics expenses in most of the products they acquire to market them, as is the case of Costco Wholesale Corporation.
"Hold the price on the hot dog and the soda a little longer – forever,” Costco’s COST chief financial officer Richard Galanti added. https://t.co/apJHcA0aeN
— Tren Griffin (@trengriffin) September 24, 2022
The second largest chain in the world in the retail category after Walmart, announced the strategy it will follow for the rest of the year.
During a phone call addressed to several media outlets, Richard Galanti, Costco’s chief financial officer, acknowledged that they have adjusted prices in some areas of their business model to avoid transferring the rise in costs to the final products and services that end up in the hands. of its consumers.
This scheme is how they have avoided increasing the price of promotions as simple, but as emblematic as their hot dog and soda combo, which is offered in the food area of their stores for only $1.5.
In this regard, the executive pointed out that there are no immediate plans to modify the price of this package nor that of the annual membership for its clients, which will continue to be $60 dollars.
“Those things help us to be more aggressive in other areas, to keep the price of the hot dog and the soda down a little bit longer. We are confident in our capacity and at some point we will have to raise prices, but not this year,” he noted.
Galanti estimates that, during the fourth quarter, price inflation at Costco was around 8%, with increases “a little higher on the food and sundries side.”
However, several specialists agree that in that period the company recorded quarterly revenues of $72.09 billion dollars and earnings per share.
Perhaps foreseeing this scenario, for a couple of months, faced with questions about a possible price increase, Craig Jelinek, CEO of Costco, ruled out this option completely.
Travis M. Andrews is a features writer for The Washington Post. He joined The Post in 2016 as a reporter for Morning Mix. He was previously a travel and culture editor for Southern Living magazine, a contributing pop culture reporter for Mashable and the Week, and a contributing editor for the Syfy blog Dvice. He also has freelanced for magazines, including Esquire, GQ and Time. He is the author of the coming book “Because He’s Jeff Goldblum,” a semi-rumination and semi-ridiculous look at the career of the enigmatic actor and an exploration of the shifting nature of fame in the 21st century, to be published in November by Plume.