Costco Chief Financial Officer Richard Galanti is providing a warning about the challenging times that U.S. consumers are facing due to ongoing food inflation. The warehouse chain has seen explosive price increases in various everyday items, and this trend is expected to continue throughout the rest of this year and into 2024. Reports reveal price hikes of up to 70% in certain key categories. In addition, some shelves at Costco stores have been empty. To help consumers prepare for these difficult circumstances, we have compiled information on the grocery products that have experienced the steepest price increases in recent weeks and months and identified which items are still in low supply at Costco.
Over the past year, it has become evident that the cost of various products, from produce to baked goods to dairy items, has been rising at Costco warehouses. Recent reports indicate that this trend has intensified in the past few months, with new rounds of price hikes being introduced into the company’s system. Staying cognizant and ready for these changes is essential.
Since April, there have been price increases ranging from 30% to 70% observed at Costco locations, according to industry expert Julie Ramhold of DealNews.com. This trend continued in May and June, as confirmed by numerous consumer reports. The most significant price hikes were seen in the meat category, which includes beef, pork, poultry, and fish. For example, a four-pound pack of Costco’s Kirkland Signature Sliced Bacon is now selling for $21.99, up from $16.99 just a couple of months ago. It was noted in May that ground beef prices soared to $25.99 at Costco, while the same product was priced at $19.49 at Aldi. The steepest increase was observed in King Crab prices, which saw a 70% surge from $22.99/lb to $38.99/lb.
In addition, dairy products and eggs continue to face shortages at Costco warehouses, and their prices are rising faster compared to other big-box stores. For many consumers, these higher prices make Costco unaffordable. Though there may still be deals available for certain products, the cost of essential staples is reaching record levels.
Bloomberg’s data reveals that these price increases are already impacting Costco’s financial performance. In May, the company experienced its third consecutive month of sales decline as U.S. consumers turned to cheaper stores. In June, CFO Richard Galanti warned of difficult times ahead for U.S. consumers. He noted a significant shift in customer purchases from beef products to more affordable options like pork and chicken, which is a trend typically observed during previous recessions.
Investors, who were already concerned about Costco’s rising prices, supply chain issues, and slowing sales, were further alarmed by Galanti’s cautious remarks. As a result, Costco stock dropped by 20% from March levels. With high prices deterring more and more customers, turbulence is on the horizon for the warehouse chain. However, before things spiral out of control, it is crucial to stay vigilant for deals and be prepared for the inflationary crisis expected at major grocery stores in the coming months.
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