Ever get to the retail store checkout counter and be surprised by the final amount? Us, too. You might have tallied up an approximate amount you thought you were going to spend and then experienced whiplash when the cashier gave you the price of your haul. What happened?
Taxes, fees, and unclear pricing strategies or mislabeled products could be to blame.
That’s why we love Costco’s new pricing motto: “Why buy at Costco? The price you see is the price you pay.” The all-in pricing includes installation, haul-away pricing, and warranties.
In an earnings call in March, Costco’s retiring Chief Financial Officer, Richard Galanti, said the company expected inflation to come in at 1% but it was lower than that. It’s “essentially flat” Galanti said, noting that it was 9% a few years ago.
That means members could save more money than they have in recent years.
The warehouse is taking price reductions wherever they can, making them particularly competitive with Target, Walmart, Lowe’s and Home Depot.
He named specific products that have come down:
“Anecdotally, everything from simple items like reading glasses from $18.99 to $16.99, the 48-count of Kirkland signature batteries from $17.99 to $15.99, a 24-count of Pellegrino from $16.99 to $14.99, and even four pounds of frozen fruit for $14.99 down to $10.99 with new crop pricing,” Galanti said in the call. Those price reductions were mostly due to lower commodity and freight costs from a few years ago.
He also shared the pricing policy such as the “Price You See is The Price You Pay.” That means the warehouse giant is sharing the price of appliances, tires, televisions, computers and mattresses, as well as what’s included in their price. For example, when buying tires the guarantee would cover the costs of installation, rotation, balancing and the five-year warranty.
It looks like the company still holds its founding values in place, to “offer the best quality merchandise at the lowest possible prices,” according to co-founders Jim Sinegal and Jeffrey Brotman.
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