Why Costco is shutting its doors on Memorial Day even as it emerges a winner in the tariff era

Time of India

21-05-2025

Costco balances Memorial Day closure with strong gains amid tariff pressures
Costco customers looking to stock up for Memorial Day barbecues will need to plan ahead this year. The beloved retail warehouse giant is keeping all its US locations closed on Monday, May 26, 2025, in observance of Memorial Day, a move that aligns with its long-standing tradition of recognizing national holidays and giving employees time to rest and reflect.
More than just a day off, Memorial Day holds deep significance in the United States. It commemorates fallen military service members, and Costco's choice to close its doors speaks to a company culture that places values on par with profits, a rare feat in the retail sector.
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But while stores go dark for 24 hours, Wall Street sees Costco shining through a much larger battlefield and is now the one unfolding in global trade.
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Costco closes for Memorial Day and more key holidays in 2025
Costco has confirmed that it will remain closed on Memorial Day as well as several other holidays throughout 2025. These include Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. The closures reflect a consistent message: respect for major national events and an understanding of work-life balance in retail employment.
According to the Wounded Warrior Project, Memorial Day specifically honors "the sacrifice and loss of those who served and died in the military.' Costco's move is not just symbolic but also strategic, reinforcing its customer loyalty by standing out in an industry often criticized for holiday consumerism.
The company's commitment to pausing business on key dates has long been part of its employee-first policy, which often earns praise from both workers and consumers.
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Tariff turbulence creates opportunity for Costco in 2025
While many retailers are struggling amid rising tariffs and inflation, Costco is projected to be one of the few winners in this high-pressure environment. Analysts at Loop Capital have dubbed the company a 'tariff winner' thanks to its unique wholesale model and value-driven membership base.
In a recent report, Loop Capital reiterated its buy rating on Costco's stock but slightly revised its price target from $1,150 to $1,045. Despite the adjustment, Costco remains resilient with stock dropping less than 1 per cent in 2025, far outperforming the S&P 500, which has plunged 15 per cent over the same period.
Analyst Laura Champine explains that while short-term risks remain, Costco's deliberate pricing approach will help it recover and even expand its market share.
'We're assuming that margins are negatively impacted by tariffs. Costco is slow to pass on cost increases, so there is certainly risk to even our lowered estimates in the near-term,' she said. 'Over time, Costco capitulates to market pricing trends to capture its normal margin levels.'
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Why Costco's model may weather the next recession
Costco's massive membership base, tight inventory control, and minimal advertising give it a defensive edge when the economy falters. With consumer spending under pressure, the retailer's ability to offer value becomes even more attractive to shoppers tightening their budgets.
Loop Capital believes that the very economic volatility troubling other retailers is what enhances Costco's value proposition. As costs rise industry-wide, shoppers are increasingly turning to bulk-buying and reliable pricing in areas where Costco excels.