Costco has decreased the prices of hundreds of items since the start of 2023, according to executive Pierre Riel.
The chief operating officer of Costco Wholesale Corp.’s international and Canadian division made the comments in Ottawa to a House of Commons committee studying food prices.
“We have mitigated price increases and accelerated price decreases as input and commodity prices drop,” Riel told MPs in French.
Amid pressure on grocers to stabilize food prices, Riel said Costco has continued to invest in its private-label brand, Kirkland Signature.
“We have increased the number of items by 12 per cent in the last four years,” Riel said in French, adding that the Kirkland products “offer at least 20 per cent savings” compared with national branded items.
Costco also continues to invest in Canadian suppliers, with almost two-thirds of its Kirkland products manufactured in Canada, and in its employees, Riel said.
The starting hourly wage for Costco employees was raised in September to $18.50, he said, and the average hourly wage today is $30.20.
Like the other grocers, Riel said suppliers continue to come to Costco with requests to increase prices. However, he said Costco doesn’t participate in the industry practice of freezing price requests for a couple of months over the holiday season.
Instead, Riel said the company always looks for ways to lower prices and does what it can to mitigate price increases. He said the company’s membership model allows it to offer products at the lowest possible price.
“Our strategy has worked because we offer a value. And because of this, our membership basis is extremely strong and has continued to increase in the U.S. and in Canada,” he said in French.
Last fall, the federal government summoned leaders from the five major grocery sellers in Canada to Ottawa to discuss stabilizing food prices. The government told the grocers they needed to come up with plans to stabilize prices.
The grocers have been in the hot seat multiple times over the past year, appearing before the House of Commons committee to answer questions about their profits amid soaring food prices.
They have also been pressed on whether they will sign an industry-led grocery code of conduct intended to level the playing field for smaller players in the food sector. Loblaw and Walmart Canada have expressed concern that the code will raise prices for Canadians.
Riel told MPs Tuesday that if the code is well-defined and its principles are consistent with the wholesaler’s own principles, it will sign the code.
But right now, Costco doesn’t have enough detail on how the code will work, he said.
“We look forward to reviewing the details of how the code will function day to day, who will participate, how disputes will be resolved, and in the end, how the code will impact food prices for the Canadian public,” Riel said in French.
Costco, which is publicly traded on the Nasdaq market in the U.S., reported its net income rose more than 16 per cent to US$1.59 billion in its latest quarter ended Nov. 26, compared with the same quarter a year earlier.
Net sales increased 6.1 per cent, and increased 6.4 per cent in Canada, or 8.2 per cent on an adjusted basis.
This report by The Canadian Press was first published Feb. 13, 2024.