Costco leans on SKU flexibility, buyer experience for tariff strategy
The retailer has also opted to shift production origins and consolidate buying to lower the cost of goods.
Costco is changing its product assortment “where appropriate” to mitigate the impact of tariffs, executive vice president and CFO Gary Millerchip told analysts during a Q4 earnings call.
For instance, the retailer is leaning into its private label Kirkland Signature products and ramping up domestically sourced items, such as health and beauty, live goods, tires and mattresses.
“We believe our expertise in buying and the flexibility afforded by our limited SKU can give us greater agility to navigate the current environment and minimize the impact of tariffs,” Millerchip said.
Kirkland Signature products, in particular, continue to help the retailer deliver alternatives to some tariff-impacted goods, Millerchip said. In Q4, Costco launched more than 30 new Kirkland Signature items, such as grass-fed beef sticks, organic extra-firm tofu, apparel items and the “combo calzone,” which is the retailer’s latest addition to the food court menu.