A Costco executive says the grocery retailer has cut prices on hundreds of items since the start of 2023.
Costco Wholesale International and Canada executive vice-president and chief operating officer Pierre Riel made the comments to a House of Commons committee studying food prices.
“We have mitigated price increases and accelerated price declines as commodity costs and production factors decline, despite the weakening of the Canadian dollar,” Mr. Riel said in French. federal deputies.
Despite pressure on grocers to stabilize food prices, Costco continued to invest in its private label, Kirkland Signature, Riel said.
He said Costco has increased the number of food items carrying this brand by “more than 12% since 2019,” adding that Kirkland products provide “savings of approximately 20%” compared to national brand items. .
Costco also continues to invest in Canadian suppliers, with nearly two-thirds of its Kirkland products manufactured in Canada, as well as in workforce, Riel said.
The starting hourly wage for Costco employees was increased in September to $18.50 and the average hourly wage today is $30.20, the executive noted.
Like other grocers, Mr. Riel mentioned that suppliers continue to ask for price increases.
However, he clarified that Costco does not participate in the industry practice of freezing price requests for a few months during the holiday season.
Instead, the company is always looking for ways to lower prices and doing what it can to mitigate price increases, Riel said.
He mentioned that the company’s membership model allows it to offer products at the lowest possible price.
“Our proven business model demonstrates that our strategy works because of the value we bring to the market; our membership base is large and has seen great growth over the past few years,” he said.
Last fall, the federal government summoned the heads of Canada’s five major grocery chains to Ottawa to discuss stabilizing food prices.
The government has told grocers they need to develop plans to stabilize prices.
Costco open to code of conduct
Grocers have been in the hot seat several times over the past year, appearing before the House of Commons committee to answer questions about their profits amid soaring food prices.
They were hot on their heels over whether they would sign a code of conduct led by the food industry and intended to level the playing field for smaller players in the food sector. Loblaw and Walmart Canada have expressed concern that the code would increase prices for Canadians.
Mr. Riel told MPs on Tuesday that if the code is well defined and its principles are consistent with those of the wholesaler, Costco will sign it.
However, the company does not currently have enough details on how the code will work, he said.
“We will continue to examine how the proposed code will work, who will choose to apply it, how disputes will be resolved and ultimately what its true effect will be on food prices for Canadians,” said Mr. Riel.
Costco, which is publicly traded on the Nasdaq market in the United States, announced that its net profit rose more than 16% to $1.59 billion in its latest quarter ending November 26, compared in the same quarter of the previous year.
Net sales increased 6.1% overall, and 6.4% in Canada, or 8.2% on an adjusted basis.