Here’s How Costco Plans to Avoid Tariff-Induced Price Hikes, According to the CEO

Costco is beloved, in part, for its membership benefits, wide selection of items, and affordable prices. But with tariffs—taxes charged on goods bought from other countries—on many food items already in effect or expected to go into effect soon, shoppers are growing increasingly anxious about higher prices. Additionally, for some products such as olive oil, bananas, and canned tuna, prices have already gone up. However, while smaller retailers are less able to absorb higher costs, big-box stores like Costco are generally better equipped to handle price increases and any uncertainty surrounding new and existing tariffs. 

In fact, during the 2025 third quarter earnings call that took place late last month, Costco CEO Ron Vachris shared that the superstore chain already has plans in place to safeguard those lower prices that keep consumers coming back time and again. Keep reading to learn more about how Costco will (try to) keep prices down even as tariffs are set to make many everyday items more expensive.

Goods Are Being Rerouted to Other Countries

“We’re remaining agile as a situation with tariffs evolves, while also supporting the commitments we’ve made with our long-term suppliers,” Vachris explained. “As an example of this, during the third quarter, we rerouted many goods sourced from countries with large tariff exposure to our non-U.S. markets.” Costco has stores in Canada, Japan, and a handful of other countries, which likely received some of those rerouted items.

While this doesn’t have a direct impact on American consumers, it can help Costco avoid higher costs overall, meaning the company would be less likely to raise prices for all shoppers.

Summer Items Are Already in Stock

In an effort to avoid future tariffs that have yet to go into effect, Costco has stocked many of its warehouse shelves with summer products ahead of schedule, thus sparing consumers from spending more money due to tariff-related price hikes. In other words, since these soon-to-be-taxed products are already in stores, shoppers won’t need to pay more for them just yet.

Costco Has Negotiating Power

Unlike other, smaller stores that can’t negotiate with large suppliers, Costco actually has an advantage when it comes to working with the brands that supply various items for sale. Since Costco limits and controls the inventory it sells, the company is flexible in ways that other retailers aren’t, and is able to make changes or work with suppliers when necessary. This, in turn, allows the chain to minimize the impact tariffs (or any other price increases) will have on its customers. 

As Vachris put it: “We are confident in the ability of our operators and merchants to rise to the challenges and continue to offer great service and find consistent values for our members.”

….And Complete Control of Its Kirkland Signature Brand

Costco’s in-house brand, Kirkland Signature, consists of items such as coffee, chocolate chip cookies, and even vodka. And because Kirkland Signature is Costco-owned, the retailer can decide exactly where to source certain items from, and can opt to avoid buying products (or even ingredients for certain products) from countries with high tariffs. Additionally, Costco can decide to introduce new Kirkland Signature products that are less expensive to make.

“We continue to move more Kirkland Signature product sourcing into the countries or regions where the items are sold, and this has helped bring us to lower costs and mitigate some of the potential impacts of tariffs,” Vachris explained.