Costco has good news - and bad news - for customers
Costco bosses have issued a dire warning to warehouse club members amid US-Israeli strikes on Iran. The cautionary words were delivered alongside ‘good news’ regarding alternative product prices.
Worryingly, gas prices are surging across the United States, with national costs up by 48 cents since last week to $3.48 (£2.59) per gallon, according to AAA data.
Experts believe high prices could persist for months due to fears that conflict could disrupt oil flow through the Strait of Hormuz, the only sea passage from the Persian Gulf to the open ocean.
“Even if oil production and distribution resume relatively quickly, US gas prices could stay elevated until the fall due to higher seasonal demand this summer,” said David Kelly, chief global strategist at J.P. Morgan Asset Management.
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Speaking to CBS News earlier this week, the White House confirmed that the Trump administration had a ‘strong game plan to keep the energy markets stable’ and that the rise in oil and gas prices in the country was nothing but a ‘short-term’ issue.
Costco warn war may ‘impact fuel costs’
Gary Millerchip, Executive Vice President and CFO of Costco, has said that his customers are likely to feel the pinch and may have to go without some of their favourite products as war continues.
“The situation in the Middle East could impact fuel costs and shipping schedules if there is instability in the region for a sustained period of time,” he warned, as reported by The Street.
However, Millerchip attempted to quell worry by claiming that Costco merchants ‘felt good’ about the current inventory position heading into Spring.
The publication reported that the business would continue its attempt to offset rising gas prices by working to ‘be the first to lower prices where we see opportunities to do so’.
As well as cutting costs, the company plans to leverage its Kirkland Signature brand.
“Kirkland Signature remains a top focus to deliver great value for our members, with KS items typically offering 15 percent to 20 percent value compared to the national brand alternative with equal or better quality. In Q2, we launched approximately 30 new KS items, including crispy wings, blackened salmon, and various apparel items,” Millerchip said during a second-quarter earnings call.
Costco offers customers ‘good news’ on egg prices
But it isn’t all bad news. The CFO reportedly confirmed on the call that Costco is ‘seeing significant unit and market share growth in eggs’ because of the brand’s ‘strong value proposition’.
“Overall inflation decreased slightly in Q2 as we saw lower inflation in foods and sundries and fresh, led by deflation in produce, eggs and dairy,” he explained.
Last month, CNBC reported that egg prices had dropped in the United States by 34 percent.
The statistic came just over a year after bird flu wiped out nearly 19 million egg-laying hens, driving prices up to more than $9 for a dozen in some places, as per USDA market data.
We had farmers that worked really hard to make sure that they have extra hens on hand,” Emily Metz, president of the American Egg Board, told Bloomberg in late February.
“As a result, we have a very strong supply right now of eggs. That’s why the market is where it is.”
As of 1 January, there were 309 million layer hens producing table eggs across the nation, the most since December 2024, according to US Department of Agriculture data.
Ella Scott