Costco warns 'prices will go up' due to new tariffs

[Jose Garcia]

Source: The Hill

Retail giant Costco says it will likely have to raise prices due to the ongoing trade war between the U.S. and China.

USA Today reports that Costco's chief financial officer, Richard Galanti, said during an earnings call with investors that the company is hoping it does not need to raise prices, but is preparing to do so after new tariffs were announced this month between the two nations.

“At the end of the day, prices will go up on things,’’ Galanti said. “We’re hopeful the ebbs and flows of the relations between our countries improves in that regard.’’

Read more: https://thehill.com/policy/finance/international-taxes/446444-costco-warns-prices-will-go-up-due-to-new-tariffs

[keithbvadu2]

1. No sweat! Dotard says China is paying for it.

No sweat! Dotard says China is paying for it.

[dalton99a]

2. And Sam's Club and Walmart

[mahannah]

3. "at the end of the day"...

[KY_EnviroGuy]

4. No shit, Costco....

following free-market laissez-faire traditions, we never expected you to reduce profits to shareholders.....

[PSPS]

6. WHat do you expect them to do? Sell things at a loss?

[KY_EnviroGuy]

9. Sharing the burden of tariffs does not mean they sell at a loss.

I personally despise big box stores due to what they've done to our small communities, but I will give this guy credit for being straightforward that consumers will eat the tariffs. More corporate execs need to do this.

He also knows this will affect their bottom line because folks will tighten their belts.

[truthisfreedom]

10. I don't believe that Costco can afford to "share the burden" of tariffs based on their business

model. I believe that they operate on a very thin margin and the model falls apart when huge tariffs are present.

[iluvtennis]

11. + agree.

[KY_EnviroGuy]

15. Probably not and still keep the market analysts and shareholders happy.

From just a quick (amateur) look at the numbers on Marketwatch, their margins are pretty thin although I'm not sure it's fair to compare with WMT and TGT because neither of those are buyer's clubs.

Regardless, the market will punish hell out of them if they allow their financials to fall to benefit consumers.

I do give them a degree of credit for appearing to be more socially conscious than most other retailers and for treating employees better than most.

[pandr32]

26. In agreement with you

[obamanut2012]

22. Would you like them to quit giving their employees health insurance and paid time off?

They already operate on a thin margin, while treating their employees well, so either prices go up or their employees suffer. Which would you rather happen?

[KY_EnviroGuy]

24. I invite you to re-read my original post and contemplate. n/t

[truthisfreedom]

8. COSTCO rocks.

They do an amazing job of most everything. It’s almost impossible to get a parking spot in their lot all day every day of the week. Their prices are amazing. The serve as a one-stop shop for so many small stores. I’m stunned by their business model.

[yardwork]

20. It's illegal for publicly traded companies to reduce profits to shareholders.

Literally, it's against the law. Publicly traded business have a legal obligation to return profits to shareholders.

[marybourg]

36. Their primary legal obligation is to their shareholders.

But there’s nothing stopping a corporation from reducing profits in good faith. Happens all the time.

[Cha]

5. At least Costco pays their employees

well with generous benefits.

[truthisfreedom]

7. Not their American Vodka, the #1 selling product at COSTCO.

[iluvtennis]

12. Just glad Costco is putting the truth out in plain site to counter trump's lies about China paying.

[Meadowoak]

29. That should be displayed on the door of every store

So many people are misinformed and think that China or Mexico is paying the tariff. When it's brought to their attention that is the customer that is paying, maybe they will pay more attention to what Trump's actions are doing to them.

[MurrayDelph]

13. Even Dollar Tree

has announced they will have to start charging more than a dollar because of tariffs.

[riversedge]

27. I think they said their new motto will be ---EVERYTHING UP TO $5

[Aussie105]

14. Prices are bound to go up.

Depending on the tariff on the items, of course.
There my even - gasp- be a price increase snuck in on non tariffed items, just because some can.

Hopefully the Trump supporters will see price rises and put the cause of it at Trump's feet, along with the tax relief they didn't get.

They are going to wake up some day, hopefully. Trump can't live up to his promises, to say the least.

[dustyscamp]

16. I only go there for the food court mostly

Their pizza, chicken bakes and hotdogs are yummy

[3Hotdogs]

17. The gas, with using the Costco Visa, is .25 cheaper than any other gas station around me.

[3Hotdogs]

18. Thank God for all this winning.

And yes, I am getting tired of it.

[Talitha]

19. Tariff tax question...

Shitler announces a tariff.
Stores and manufacturers raise prices.
We wind up paying more.

So what does the Govt do with this new windfall of tax money?

Is it held in a special fund somewhere, or is it secretly being re-directed into Shitler's pocket?

[yardwork]

21. What tax money?

I'm not understanding your question.

[Talitha]

25. Sounds like I misunderstood things...

From what I understood, tariffs are taxes on goods. But instead of the other country paying the tariff, WE would wind up paying them - via rate hikes on the products.

[yardwork]

28. Correct. The purpose of tariffs is to drive up prices.

It works like this: American company complains that Chinese companies charge less for similar products. That encourages people to buy the lower-cost Chinese product. If a tariff is placed on the Chinese product, then the idea is that people will buy the lower-cost American product. This protects American companies, supposedly.

The trouble is that there aren't equal American products just waiting in the wings to be purchased. In practice, tariffs lead to trade wars, as each side retaliates by raising prices. The consumer loses. And the US becomes more isolated. Entrepreneurship and development of new products declines, as the ready sharing of raw materials is hampered.

[Talitha]

30. Thanks for the info!!

[yardwork]

31. It's way oversimplified, of course!

[obamanut2012]

23. There is no "new windfall of tax money"

That isn't what a tariff is.

[roamer65]

33. A tariff is similar to a VAT.

Value Added Tax. They are common in Europe and both kill consumption.

I can say already what has happened as the business I work for was slapped with a 300 percent tariff on materials we were purchasing from China. We sourced in the US, but the American producers also raised their prices significantly to match the new Chinese tariffed prices. Money grubbers.

Inflation is going to go through the roof folks.

[roamer65]

32. The higher the better.

It needs to hurt.

[SergeStorms]

34. I must have missed Walmart's announcement.

From what I've heard they've already raised prices on many things. I don't suppose they'd want to get their buddy, Trump, upset though. Announcing price hikes might get Donnie Dim-Wit upset. They're hoping he'll cut their taxes again and provide them with another unwarranted windfall. That's what the wealthy do, take care of their own.

[Jose Garcia]

35. You indeed did miss that news from two weeks ago:

https://www.google.com/amp/s/www.nbcnews.com/news/amp/ncna1006366

[smirkymonkey]

37. Nice work, President Dipshit.