Costco Wholesale Business is a global company based in the United States that operates a chain of membership-only big-box retail locations. Since its inception in 1976, it has grown into a multi-billion dollar facility.
The consumer price indices for August 2022 were published in September. The inflation rate of 8.3% in the United States is the lowest since April 2022. It also beat forecasts, leading some to worry about the Fed rate hike.
At the FOMC meeting, markets had braced themselves for a 0.75% Fed rate hike. However, as the CPI index is larger than estimated, expectations of a 100 basis point rate hike rose last week.
To combat rising inflation, the Fed announced a 75 fps rate hike at the FOMC meeting. But even in the midst of all this, Costco has no intention of raising the $1.50 hot dog and soda price.
Costco to keep its price firm
Costco’s CFO says the company has no plans to increase the price of its $1.50 hot dog-and-soda combo. The firm’s firm decision comes amid a situation where the economy is experiencing rising inflation.
CFO Richard Galanti spoke about the decision on Thursday during the company’s earnings call.
“Lightning just struck me.” “Those things help us be more aggressive in other areas, or, as you mentioned, hold the price of the hot dog and soda a little longer — forever,” Galanti explained.
Over the past year, Costco and other retailers have increased prices, passing on the increased costs of products and raw materials to customers. Although it has fallen marginally lately, August inflation was 8.3% higher than forecast. The company also has no plans to increase its membership fees.
Even with rising inflation, Costco’s quarterly revenue was more than expected.