The retail industry has been struggling in recent years due to various challenges. The COVID-19 pandemic, which began five years ago, had a devastating impact on many businesses. Restaurants and retailers were forced to close overnight, and those that reopened faced a harsh environment with reduced foot traffic and soaring interest rates.
However, some companies have defied the odds and experienced significant growth. Costco Wholesale is one such example, reporting over $240 billion in revenue in fiscal year 2023, compared to about $152 billion in 2019. The company has also been expanding into new regions, including China and Europe, and opening around 20-30 stores each year.
Despite its success, Costco’s CFO recently warned that market conditions are not favorable for everyday shoppers in the US. Gary Millerchip stated that consumers are becoming “choiceful” with their spending, making more selective purchases and reining in budgets. This trend is likely to continue as inflation returns and tariffs could further affect consumer behavior.
Tariffs could also impact Costco’s operations, making it more expensive to import inventory and affecting supply chains. As a result, the company may see increased costs for customers. While Costco’s pay hike to $20 per hour is a positive move for employees, the CFO’s warning highlights the uncertain future of retail in the US.
Source: https://www.thestreet.com/retail/costco-exec-sounds-the-alarm-on-a-concerning-customer-trend