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Costco is
the only place where you can simultaneously buy seven-pound tubs of
Nutella and learn about the state of the post-pandemic economy. In its
earnings report yesterday, the company highlighted several broader
challenges and opportunities facing US businesses right now.
1. Inflation
“Inflationary factors abound,”
CFO Richard Galanti said yesterday. Those factors include higher wages,
higher costs for freight, more consumer demand, supply chain chaos, and
“various shortages of everything.”
And yes, that means you eventually might need more than a $5 bill to buy a Costco rotisserie chicken:
- Beef prices are up as much as 20% in the last month.
- Prices for some apparel items are 3%–10% higher.
- Overall,
the company said that price inflation at the selling level, excluding
gasoline, was 2.5%–3.5%, much higher than in March.
What Costco
is seeing is reflected in the broader economy. A report released
yesterday showed that a measure of inflation grew in April at its fastest annual pace since the ’90s.
2. The “return to normal”
If we haven’t reached herd immunity yet, Costco is making sure we get there soon: Free food samples are coming back.
The company said it’s “beginning a phased return to full sampling”
after 14 long months without offering shoppers microwaved mini tacos for
nourishment.
- In another sign that nature is healing, two weeks ago Costco dropped its requirement for shoppers who are fully vaccinated to wear masks, a day after the CDC relaxed requirements.
- Costco was one of the first US retailers to mandate masks in early May 2020.
However,
this being the “new normal” and all, some pandemic precautions will
remain in place. Food courts will return, but at half-capacity and with
spaced-out tables. And samples will be given behind plexiglass screens.
But hey, we’ll take it. And probably come back in two minutes and hope you forget our face.
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