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Costco Wholesale Corp. is rerouting its supply chain and sourcing more of its in-house brands locally as the grocery chain looks to avoid tariffs.
Chief executive Ron Vachris said his company is looking at ways to avoid impacts from tariffs, including sending items from high-tariffed nations to stores outside the United States and sourcing products from its Kirkland Signature brand in domestic markets.
“We continue to move more Kirkland Signature product sourcing into the countries or regions where the items are sold, and this is helping us to lower costs and mitigate some of the potential costs of tariffs,” he said during the company’s third-quarter conference call on Thursday.
The changes mean more of Kirkland’s products in Canadian stores are locally sourced.
Vachris also said his company has sped up the process of importing summer-related items to avoid any unexpected changes to the tariff ecosystem.
“Actions such as these help us provide value to our members,” he said.
The company reported an eight per cent year-over-year quarterly jump in net sales, reaching US$62 billion.
It said it had growth in every international market, despite the “Buy Canadian” trend that could have hurt the U.S.-based brand.
“Our members are very vocal in sharing feedback and we certainly hear some feedback from members that they wish the relationship was better today between the countries, but in terms of sales growth … we continue to have really strong sales growth in Canada and internationally,” chief financial officer Gary Millerchip said on the call.
• Email: bcousins@postmedia.com
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