Costco just lowered prices on key items

As a 20-year Costco member who shops at the store on a weekly basis, I'm pretty used to the warehouse club giant's prices. And I can say that for the most part, they're all highly competitive.

There's a reason for that.

Unlike traditional retailers that have to inflate prices to pay for overhead and profits, Costco relies on membership fee revenue to generate profits.

During Costco's most recent operating quarter, the company reported $1.37 billion in membership fee income, up 10.7% from a year prior. The company also said that as of the end of the quarter, it had 82.9 million paying members.

Of course, some shoppers refuse to pay a membership fee for the privilege of walking into a store to spend money. I'd argue that their stubbornness could be costing them, since I'm able to more than make up for my membership fee in the form of savings on groceries and the many other everyday essentials I buy at Costco.

But having membership fee revenue to offset its costs isn't the only reason Costco is able to keep its prices low. There's another strategy that allows Costco to remain competitive at a time when inflation is surging and many retailers are responding by raising prices.

Costco just lowered prices on key items

Costco doesn't always make a big production over lowering prices. And there's a reason for that.

Costco's aim is to perpetually undercut its competitors and offer members maximum value. So when the company sees an opportunity to lower prices, it tends to jump on it without making a show of it or plastering "sale" signs all over the store.

During the company's third-quarter 2026 earnings call, CEO Ron Vachris, said, "Our goal is to be the first to lower prices and last to raise them."

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CFO Gary Millerchip reaffirmed that sentiment, stating, "Our goal is to be the first to lower prices where we see opportunities to do so."

And Millerchip pointed out that Costco did, in fact, quietly lower the price of a number of key items during its most recent quarter:

• Kirkland Signature Crispy Wings dropped from $16.99 to $14.99
• Kirkland Signature Milk Chocolate Almonds dropped from $19.99 to $18.99
• Kirkland Signature Golf Balls dropped from $32.99 to $29.99
• Kirkland Signature King Size Sheets dropped from $89.99 to $79.99

Costco's Kirkland Signature brand is key to staying competitive

Private-label brands are pretty common in retail. Walk around your typical supermarket, and you'll generally see store brands all over the shelves.

But Kirkland Signature differs from many of the store brands you'll see in that it's not just a cheap alternative.

Sure, you might save money by focusing on the Kirkland label. In fact, during Costco's most recent earnings call, Millerchip said, "We continue to innovate with new KS items, offering savings of at least 15% to 20% to the national brand equivalent with equal or better quality."

But what makes Kirkland so special is that members know they're not skimping on quality when they favor it over a national brand. In fact, it's common for Kirkland products to not only match the quality of national brands, but exceed it.

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"Kirkland is an extension of the value promise Costco extends to customers," retail expert Jennifer Bartashus told RetailWire. "Costco is all about discovery and value. The ability to offer even bigger discounts through the Kirkland brand without sacrificing quality really resonates with customers."

At a time when consumers are feeling increasingly squeezed by inflation, that's important.

A good 76% of Americans called cost-of-living increases their biggest economic issue in a May CNN poll.

By not only offering competitive prices to begin with, but lowering them without fanfare, Costco is doing its part to prove to members that they can rely on the Kirkland brand for savings even during challenging economic times.

And it's that value proposition that helps explain why Costco is able to retain so many members even at a time when consumers on a whole are cutting back on spending.

Maurie Backman owns shares of Costco.

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This story was originally published June 5, 2026 at 9:03 PM.