The CEO of Costco, Craig Jelinek, will step down by the end of this year, concluding his more-than-a-decade tenure during which the membership warehouse company achieved remarkable success, as announced by the company on Wednesday.
At the age of 71, Craig Jelinek, who assumed the position of Chief Executive from Costco co-founder James Sinegal in 2012, will continue to provide advisory services until April 2024 and will remain a member of Costco’s board, according to the company’s statement.
Subsequently rose through the ranks
As the new year begins, Ron Vachris, Costco’s President and Chief Operating Officer, with over 40 years of service with the company, will take on the role of Chief Executive. Vachris, aged 58, initially joined Costco as a forklift driver and subsequently rose through the ranks, holding various significant positions related to the merchandising and business operations of the Issaquah, Washington-based retailer.
Craig Jelinek’s departure from the top position follows several years of robust sales growth at the company, particularly during the pandemic, when consumers shifted to more cost-effective choices for their everyday essentials. Under Jelinek’s leadership, Costco’s share price has surged five-fold, and annual revenues have grown from $99 billion at the beginning of his tenure to $242.3 billion in the most recent fiscal year ending in August.
Executives from the Seattle-based company, which boasts 591 warehouses nationwide, recently informed its 130 million U.S. members that they would not be raising prices this year. This move was unexpected, given that Costco had historically increased its annual membership fees by $5 every five years.
Costco’s standard Gold Star membership has remained at $60 per year since 2017, with the last price increase occurring in 2011. The Executive Membership, priced at $120 per year, offers additional discounts and a 2% return on qualifying purchases for members.
Adjusting to evolving consumer shopping habits
Nevertheless, a future price increase is seen as a matter of “when, not if,” according to Costco’s Chief Financial Officer, Richard Galanti, who made the statement during a call with investors following the release of the company’s fiscal fourth-quarter results last month.
“We’ll let you know when we know,” Galanti added. “So, you know, stay tuned. We’ll keep you posted.” In the meantime, Costco has been adjusting to evolving consumer shopping habits by incorporating up to 50 “smaller ticket indulgent items” like snacks. This approach, according to Galanti, has led to an increase in the number of items shoppers place in their baskets.
