The “Costco Effect” is having a domino-like impact on the world of retail, forcing giants to rethink strategies in the face of tariffs, supplier pressures, and skittish consumer loyalty.
Costco, a retail powerhouse, has consistently delivered steady sales despite shaky economic conditions. Similar to its retail rival Walmart, Costco’s appeal to wealthier shoppers – particularly value-seeking consumers – has helped it carve out a dominant position. But with U.S. tariffs on imported goods threatening profits and production, two of America’s biggest retailers are facing mounting pressure, and the clock is ticking…
However, relying on membership sales to offset tariffs isn’t without risks. “Costco will either have to raise prices or pressure suppliers to absorb the costs,” Craig Zawada, chief visionary officer at PROS, a software development company, told Quartz in an interview. Costco traditionally operates on thin margins, so any tariff would significantly affect its bottom line.