COSTCO has revealed plans to lower prices on a number of popular items, but warned inflation is biting the warehouse retailer.
In its latest earnings call with investors, Costco CEO Ron Vachris revealed the company was slashing prices on a variety of products in its Kirkland Signature range including Organic Peanut Butter, Chicken Stock and Sauvignon Blanc.
Costco is slashing prices on a number of popular items[/caption]
Costco CEO Ron Vachris told an earnings call the retailer was focused on helping its members get value for money[/caption]
Kirkland Signature Peanut Butter will be reduced from $11.49 to $9.99 while Chicken Stock will be cut from $9.99 to $8.99.
Its Signature Sauvignon Blanc will now be priced at $6.99 dropped from $7.49 last quarter.
Revealing the price drops, Vachris said the company was focused on ensuring customers got the best bang for their buck in the face of inflationary pressures.
He noted the company’s Kirkland Signature range was often the best value for members.
Our goal is always to be the first to lower prices where we see the opportunities to do so
Ron Vachris
“That’s something that we’ve done for the history of the company. We’re going to continue to invest in price.
“And some of it may come in holding certain prices as some commodities are starting to increase, but investing in items like Gary described, leading with Kirkland Signature.
“I mean, we feel that we’re going to be asking our members and our vendors to contribute with lower prices.”
While focused on keeping prices low, Costco executives noted costs were increasing for the business.
Costco is not the only company battling rising cost pressures.
Soaring operational costs have been reported by a number of retailers across the country amid inflationary pressures globally.
Some retailers say rising costs are being driven by supply chain disruptions like transportation delays or shortages which can lead to higher prices.
Rising wages can also lead to higher operational costs while fluctuations in raw materials used to produce goods can also impact retail prices.
COSTS RISING
Brick and mortar retailers have also been forced to compete with a rise in online shopping such as Amazon, leading to the closure of shops across the country.
Despite inflationary headwinds, Costco CFO Gary Millerchip said the company was focussed on helping consumers get better value for money for their memberships.
“It’s partly where is it that we can lower prices, of course,” Millerchip told the earnings call.
“Part of it is where can we mitigate the impact of inflation to maintain the value for the member even if costs are increasing.
“It’s if we — how can we improve the membership experience, including investing in our employees’ wages as we’ve done recently as well.
“And of course, innovation with new products through Kirkland Signature.”
The U.S. Sun reports on all things retail chains and discount shops such as Costco and Dollar Tree.
In the latest earnings call, Costco CEO also revealed consumers could get extra discounts under its Costco Next program with cheaper items just for members.
To become a member at Costco and take advantage of Costco Next, you must purchase one of two membership options — Gold Star or Executive.
