Discounted prices have long been set by Costco, known for rocking low prices on everything from bulk merchandise to a $1.50 hot dog combo. That commitment remains steadfast under Ron Fatkris, Costco’s third CEO in its 40-year history, who took office in late 2024 shortly before President Trump’s sweeping tariffs take effect. Vacres is now dealing with economic uncertainty amid volatile tariff policies. Following a Supreme Court ruling last month that struck down part of the administration’s definitions and raised questions about potential refunds, Vacres announced yesterday (March 5) that Costco will return any refunds directly to customers.
“As we have done in the past, when legal challenges have led to recovery of charges that were somehow passed on to our members, our commitment will be to find the best way to return that value to our members through lower prices and better values,” Vakris told analysts. “We will be transparent about how we plan to do this, if and when we receive any refunds.”
Costco anticipated this development months ago. In December, the company sued the federal government seeking to recover the tariffs, joining thousands of other companies — from Revlon and Prada to Goodyear and Barnes & Noble — that claimed that duties under the International Emergency Economic Powers Act (IEEPA) were imposed illegally.
The lawsuit was a bold move for Fatkris, who has kept a low profile since taking the helm. A lifelong Costco veteran, he started as a forklift operator at Price Club, which later merged with Costco, in the 1980s and steadily rose through the ranks through warehouse management, real estate development and merchandising before serving as president and chief operating officer from 2022-24.
Upon taking over, Vachris pledged to maintain Costco’s premium value proposition, keeping the $4.99 rotisserie chicken combo and the $1.50 hot dog and soda combo unchanged. Doing so savesCode to our staff about how easy it is to raise prices-But how do you know how not to do that? How can you continue to cut costs without sacrificing quality? The CEO said in a 2024 interview with South Sound Business.
Vachris’ leadership style also emphasizes communication with customers. He is known to personally respond to, and sometimes even send, clients’ emails Complaints about low stock of ketchup in stores.
Under his supervision, addressing tariffs was a top priority. The Trump administration’s tariffs, imposed nearly a year into his term, forced Costco to adjust its supply chain, raise some prices and absorb the financial hits. About a third of the company’s U.S. sales come from imported goods, making trade policy a major concern.
To adapt, Costco shifted production from high-tariff areas, consolidated global purchasing operations, and relied more heavily on its locally sourced Kirkland Signature brand. With these strategies in place, Vakris said Costco is well positioned to weather future tariffs, including the temporary global tariffs enacted in February.
The CEO’s remarks accompanied Costco’s earnings report for the quarter ending February 15, which showed revenue rising 9 percent year-over-year to $69.5 billion and net income rising 12 percent to $2 billion.
Looking to the future, Vachris plans to expand Costco’s reach with new warehouses domestically and abroad. Four new locations opened in the fourth quarter, bringing the total to 924 locations worldwide. The company expects 28 additional job opportunities in fiscal year 2026.
Digital progress is another focus. Costco is investing in mobile payment options, employee pre-screening tools, and AI-based online personalization. Capital expenditures for 2026 are expected to reach $6.5 billion, covering warehouse expansion, redesign and digital upgrades.
However, price stability remains Vacres’s top priority. During the latest quarter, Costco cut prices on eggs, cheese, coffee and paper goods amid declining inflation, and the CEO said additional price cuts on textiles, bedding and cookware will follow as tariffs decline. “At Costco, we always want to be the first to lower prices and the last to raise prices,” he said.
