Costco accused of “greedflation”: Wholesaler reports increase in earnings while hiking up prices (2024)


A new analysis found that Costco reported consistently high profits while raising store prices

By Joy Saha

Staff Writer

Published June 10, 2024 2:00PM (EDT)

Costco accused of “greedflation”: Wholesaler reports increase in earnings while hiking up prices (1)

Costco wholesale club store(John Greim/LightRocket via Getty Images)


Pandemic-related supply chain disruptions, Russia’s invasion of Ukraine and excess savings have all resulted in one thing: high inflation. Amid the spring of 2021, prices for certain goods — especially food — increased greatly, according to the Federal Reserve System. Those price hikes eventually became more widespread by the fall of 2021, and by 2022 inflation had risen to levels not seen in 40 years.

Surely, such high inflation rates coupled with rising living costs came with consequences. Following COVID’s peak, “shrinkflation,” in which items shrink in size or quantity while their prices remain the same, grew rampant. Same with “fast-flation,” which has led to a decrease in consumer demand for fast food due to soaring menu prices.

Recently, there’s been much chatter about “greedflation.” Previously dismissed as a fringe theory, the concept of major corporations exploiting inflation in an effort to make huge profits has become a hot-topic amongst economists, policymakers and analysts alike. Recent studies have shown that company profits for a great number of corporations increased at much faster rates than inflation-related price markups. According to a joint study from think tanks IPPR and Common Wealth, profits for companies across the U.S., the U.K., Europe, Brazil, and South Africa rose by 30% between 2019 and 2022, significantly surpassing inflation. In the U.S., a third of major corporations were found guilty of profiteering.

Energy companies like Shell, Exxon Mobil, and Chevron were at the top of the leaderboard for highest profit surges, the study specified. On the food front, Kraft Heinz saw the highest surges.


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Now, Costco Wholesale is the latest corporation being accused of rampant greedflation. A new analysis from Accountable.US, a nonpartisan watchdog group, revealed that Costco reported consistently high profits and net incomes year over year, all while the company raised store prices and considered increasing its membership fees.

In its third quarter earnings report for fiscal year 2024, Costco reported $1.68 billion in earnings, a 29% increase year over year (YoY). In the previous quarter, Costco reported an 18.8% increase in net income YoY, from $1.4 billion to more than $1.7 billion, “as it spent $8 billion on cash dividends and $322 million on stock buybacks during the first half of its fiscal year 2024,” Accountable.US said.

The big-box retailer added that net sales in Q3 2024 increased 9.1 percent, to $57.39 billion, from $52.60 billion last year.

Amid surges in profits, Costco warned consumers that they may have to pay a heftier fee in the future for the retailer’s annual membership. Costco hasn’t raised membership prices since 2017, and isn’t planning on doing so immediately. During a March earnings call, Costco’s former chief financial officer Richard Galanti said it’s a matter of “when, not if” the retailer raises membership prices. Costco CEO Ron Vachris further suggested a price increase would actually benefit both the company and consumers, during an earnings call on May 30. An increase would award Costco additional revenue that could allow the company to lower store prices and help customers save money over time, Vachris said.

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Costco also upped the prices on some of its key goods. Costco increased its prices on gas, which is often 30 to 50 cents cheaper than other gas stations, GOBankingRates found. Last month, Costco shoppers across the U.S. and Canada noted price hikes on Kirkland Signature Organic Extra Virgin Olive Oil. Eat This, Not That reported that in one Brooklyn store, the oil was available for $24.99, compared to $16.99 in March 2023. Costco’s price hike isn’t an exception however, considering that a widespread shortage of olive oil has caused retail prices to reach record highs. Back in September, olive oil production in Spain (which accounts for more than 40% of the world’s olive oil production) had already fallen by a half — from an estimated 1.3 million to 610,000 metric tons — due to a yearlong drought and a spring of extreme heat.

Shoppers over on Reddit also noted that Costco’s Chicken of the Sea, Chunk Light Premium Tuna went up by a dollar and Enfamil baby formula increased from $49 to $58 in the past few months. Additionally, price hikes were seen for ground beef, boneless chicken, frozen burgers and protein powder.

“Costco’s massive uptick in earnings answers the question of whether they really needed to raise prices despite easing inflation. In a word: no,” said Liz Zelnick, director of the economic security & corporate power program at Accountable.US, in the group’s analysis. “Over and over, we see big wholesalers and grocers unnecessarily squeeze American families, chasing record profits rather than stabilizing prices. It’s time these companies answer President Biden’s call to get their greed in check and bring prices down.”

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Salon Food reached out toCostco Wholesale Corporation for comment but has yet to hear back.

Costco joins a list of other top grocery store chains, including Kroger, Walmart and Target, that have reported profit surges and are spotlighted in Accountable.US’ analysis. Despite the greedflation claims, Costco reportedly lowered the prices of several food items in recent weeks. Kirkland Signature shrimp dropped in price by $1, new Costco CFO Gary Millerchip announced during the company’s May earnings call. A 1.5-pound bag of Kirkland Signature Organic Pine Nuts is now $24.99 (compared to $29.99 previously), while a four-pound bag of Kirkland Signature frozen fruit is now $10.99 (compared to the previous $14.99). San Pellegrino Sparkling Water, Kirkland Signature Fully Cooked Bacon, Kirkland Signature Vanilla Extract, Sun West Calrose Rice and Kirkland Signature Grass-Fed Beef Patties are also available for lower prices.

Greedflation has been called out by President Biden, who earlier this year, blamed corporate greed — and not himself — for inflation. In February, Biden said there are “still too many corporations in America ripping people off. Price gouging, junk fees, greedflation, shrinkflation.” The president is now being urged by progressives to follow in the footsteps of Sens. Bob Casey of Pennsylvania and Sherrod Brown of Ohio, who have made “greedflation” the primary focus of their campaigns. Casey, in particular, released four reports on the issue since November 2023 and is currently working on a price-gouging bill that would allow the federal government to investigate and stop corporate greedflation.

“They’re ripping families off by jacking up prices way beyond their costs,” Casey said of big corporations in an interview with WTAJ-TV. “They’re exploding their prices all the while, they’re getting record corporate profits, and a huge tax cut. A corporate tax cut that they got in 2017. So, they’re laughing all the way to the bank.”

Read more

about Costco:

  • Nestlé taps into weight loss drug market with new frozen food line for Ozempic users
  • California's newest Costco will be one of the biggest in the world
  • Costco's small change to its rotisserie chicken has inspired big reactions

By Joy Saha

Joy Saha is a staff writer at Salon. She writes about food news and trends and their intersection with culture. She holds a BA in journalism from the University of Maryland, College Park.


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Related Topics ------------------------------------------

AnalysisBig-box RetailerBob CaseyCostcoFood NewsGreedflationJoe BidenKrogerTarget

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Costco accused of “greedflation”: Wholesaler reports increase in earnings while hiking up prices (2024)


How much will the cost of goods increase in 2024? ›

The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, increased 0.4 percent from March 2024 to April 2024 and was up 3.4 percent from April 2023. The CPI for all food increased 0.2 percent from March 2024 to April 2024, and food prices were 2.2 percent higher than in April 2023.

What is shrinkflation corporate profits? ›

"In a practice known as 'shrinkflation,' companies discreetly reduce the size or volume of common household items—everything from jars of peanut butter to bars of soap—to charge consumers more for less."

How much has the cost of living gone up in the last 3 years? ›

In 2023, the average rate of inflation was 4.1%. In 2022, the average rate of inflation was 8.0%. In 2021, the average rate of inflation was 4.7%. In 2020, the average rate of inflation was 1.2%.6.

What items have gone up in price the most? ›

Price Changes for Common Grocery Items

Since March 2020, the cost of eggs has increased by 50%, while beef roasts, flour, and sugar have each risen by over one-third. Other items with large price increases over the same time period include carbonated beverages (up 32.1%) and canned fruits and vegetables (up +31.6%).

What is hidden inflation? ›

HIDDEN INFLATION Definition & Legal Meaning

Quality and quantity that decreaes even though the price goes down. It happens when the product stays at the same price but is offered in less numbers or quality.

Should shrinkflation be illegal? ›

CHARLOTTE, N.C. — The federal government is pushing to make "shrinkflation" illegal in the U.S. as American consumers deal with the ongoing impacts of inflation on the economy. Shrinkflation is the covert way companies raise prices by slightly reducing the size of their products.

What is trickflation? ›

A shopper suggested we now use the term 'trickflation' to describe what stores are doing to make money. A user on Reddit shared what he thinks stores are doing now to make customers spend more money and coined the term “trickflation.” “We all know about 'shrinkflation,'” he said. “Can I coin the term 'trickflation? '”

What is CPI increase for 2024? ›

The Consumer Price Index (CPI) rose 1.0 per cent in the March 2024 quarter and 3.6 per cent annually, according to the latest data from the Australian Bureau of Statistics (ABS).

What is the predicted inflation rate for 2024? ›

On the basis of these inflation forecasts, average consumer price inflation should be 3.1% in 2024 and 2.0% in 2025, compared to 4.06% in 2023 and 9.59% in 2022.

What is the financial forecast for 2024? ›

Global growth is projected at 3.1 percent in 2024 and 3.2 percent in 2025, with the 2024 forecast 0.2 percentage point higher than that in the October 2023 World Economic Outlook (WEO) on account of greater-than-expected resilience in the United States and several large emerging market and developing economies, as well ...

What is the CPI rate for January 2024? ›

CPI inflation was 4.0% in January 2024 (Index: 131.5), unchanged from the December 2023 figure.

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