Costco to reduce Canadian products in U.S. stores in wake of tariffs
Consumers can expect a price increase on items imported from Canada, China and Mexico
Costco Wholesale Corp. says it is looking to reduce its reliance on Canadian products in its stores in the United States in response to tariffs from U.S. President Donald Trump.
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Chief executive Ron Vachris said consumers can expect a price increase on items imported from Canada, China and Mexico, but the company is looking to source more products from non-tariffed nations to bring costs back down.
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“There’s not many items that we can’t find something to replace or something else to bring in that category,” he said during a fourth-quarter earnings call on Thursday. “The tariffs are very fluid right now, so it’s hard to give any predictions on what we can do, but our people are very well-equipped to lower prices and defer any cost increases that come our way. We’re going to do what we can.”
Charis said Costco sources less than 20 per cent of its products from Canada, China and Mexico for its U.S. locations.
The wholesale grocery chain said adjusted net sales increased 9.1 per cent to US$57.3 billion in the three months ending Feb. 16. Its earnings per share were US$4.02, missing analysts’ expectations of US$4.10.
Among its 109 Canadian stores, adjusted sales climbed 10.5 per cent.
“The results that we reported in February are very much in line with the results we see here today; they actually have the strongest overall … sales when you adjust for (currency exchange) and gas,” Costco chief financial officer Gary Millerchip said during the call.
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