What’s Going On Here?Costco’s quarterly numbers, out last week, showed a company in rude health despite tough economic conditions. What Does This Mean?Costco, the Goliath members-only retailer, updates investors on key metrics every month, so the quarter’s 15% jump in sales won’t have come as much of a surprise. Expected or otherwise, though, that upturn is impressive in the current climate – as is the fact that profits are up 8% even as operating costs creep skyward. (Costco shelled out 8% more to suppliers than it did at the same time last year.) So far, then, Costco seems to have managed to pass on increased costs without scaring away shoppers: we’ll know whether rivals like Target and Walmart have been able to do the same when they publish their quarterly numbers in November. Why Should I Care?Zooming in: Join the club.
In a time of rising prices, one fee hasn’t budged: Costco’s $60 Gold Star annual membership (a steal considering the bargains on offer in the firm’s warehouses). Some shareholders have grumbled that the fee should be hiked to plump up profits, but with membership renewals at an all-time high of 93% in the US and Canada, Costco will be slow to tinker with its winning formula.
The bigger picture: The Costco price index.
Costco famously sells a lot of stuff: the bargains that line the store’s shelves range from everyday groceries to things like car tires and massive 340-pound safes. Stocking such a diverse set of products means the firm keeps an eye on all kinds of markets – and according to its finance chief, there has been some good news: the prices of fresh foods like beef and commodities like steel have come down a tad since last year. And with shipping costs dropping and deliveries to Costco warehouses arriving more promptly, it looks like supply chains might be improving too. Consumers, then, might breathe a tentative sigh of relief. | 
