Latest news with #Vachris
Yahoo
13 hours ago
- Business
- Yahoo
Costco's CEO started his career as a forklift driver. Now he's leading a $254 billion giant rising up the Fortune 500
Ron Vachris is the third CEO in Costco's history and a company lifer who is now pushing the wholesale club to higher revenues. During his 40+ years at Costco, Vachris rose from teenage forklift driver to CEO, and helped push the company's revenue up 5% year-over-year in fiscal 2024 to $254 billion. A little more than one year into Ron Vachris' tenure leading Costco, he is already supercharging the company's revenue. At No. 12 on the Fortune 500, Costco stands above notable companies such as Microsoft, Chevron, and Bank of America. The company's full-year revenue of $254 billion jumped 5% from the same time last year, and Vachris was instrumental to the company's success. Vachris began his career as a forklift driver in his teens for Price Club, which Costco merged with in 1993. Only the third CEO in Costco history, he is a true company lifer with more than 40 years of experience at the wholesale club. During that time, he has guided the company in a number of positions including operations chief, merchandising chief, and head of real estate, Fortune previously reported. As chief executive, Vachris was awarded a $12.2 million compensation package, including a base salary of $1.1 million and $10.5 million in stock awards and some perks such as a free executive Costco membership. In the vein of longtime former CEO Jim Sinegal, Vachris likes to take a more hands-off approach to leadership, trusting employees to perform well and even innovate. 'You've got to give people room to try new things,' Vachris previously told Fortune. That approach has paid off with new ideas from outside of the C-suite. For example, employees were the first to suggest the company could repurpose leftover rotisserie chicken for their chicken salads. In the future, Vachris is looking to tackle two areas where the company sees opportunity: international expansion and improving ecommerce and technology. On the company's most recent earnings call in late May, Vachris said Costco recently launched buy-now-pay-later capabilities on its website, and also touted the healthy year-over-year growth of the company's Costco Next program, which lets consumers buy name brands at affordable prices. Costco is also testing a new initiative, first introduced by competitor Sam's Club, that allows customers to scan items and check out easily using their phone. 'Digital and technology are important parts of our future growth, and we are investing to improve the member experience,' Vachris said on the company's third-quarter earnings call. This story was originally featured on Sign in to access your portfolio
New York Post
a day ago
- Business
- New York Post
Costco is testing big change to checkout as customers rank it a top worry
Costco has been testing checkout technology it hopes will speed up the checkout process, something members rank as one of their significant concerns with the warehouse retailer. CEO Ron Vachris said last week during the company's third-quarter earnings call that Costco has 'engaged in some 'Scan & Go done by Costco' kind of tests.' Advertisement The technology has 'been extremely successful in moving people through the lines and expediting the transactions,' according to the Costco exec. 'We've seen some very, very early results have been very positive and great adoption from our members, seeing that as well,' Vachris told analysts and investors. Scan-and-go is something that Costco fans on social media have long said they wanted the retailer to bring to its stores, with some noting Walmart-owned competitor Sam's Club offers it. All Costco locations have traditional checkout lanes with registers that members go through to purchase items. Advertisement Some also have self-checkout, according to Costco's website. 3 Costco has started to test out checkout technology in the hopes to make the checkout process easier on customers. Refrina – At Sam's Club, customers have the option to use 'Scan & Go' — they scan items as they shop and pay for them through an app with a worker scanning the digital receipt at the door. The company has started rolling out technology that uses an AI scanner to verify goods as customers leave, eliminating the need for receipt checks at the door. Advertisement Meanwhile, another warehouse retailer — BJ's Wholesale — has 'ExpressPay' that enables members to 'skip the line and scan items through the BJ's App as they shop to make checkout even faster,' according to its website. 3 CEO Ron Vachris said the company's third quarter earnings reveal that the shopping chain has 'engaged in some 'Scan & Go done by Costco' kind of tests.' Paul Martinka BJ's customers using 'ExpressPay' pay in the app and show their QR code receipt at the door. FOX Business reached out to Costco for comment on its 'scan and go' tests. Advertisement Vachris said last week that Costco 'continue[s] to work on opportunities to further improve the member experience,' telling analysts and investors to be 'on the lookout for several new technology pilots we are focusing on to help our members check out through our front end at a faster pace.' 3 A Costco executive also said the technology has 'been extremely successful in moving people through the lines and expediting the transactions.' UCG/Universal Images Group via Getty Images Asked about 'scan and go' during a past company's earnings call in December, he said the company does hear about the technology occasionally. He said at the time that self-checkout 'has been a great option for our members, and we focus on that' but that the company was 'going to keep an eye out there on technology and make sure that we're doing our part to keep the experience as strong as we can for our members.' As of late May, Costco had 905 locations around the world that its over 142.8 million membership cardholders can shop at. Michael Dorgan contributed to this report.
Miami Herald
5 days ago
- Business
- Miami Herald
Costco CEO shares very good update on tariffs
If there's one thing Costco tries really hard to do, it's offering its members great value. Costco knows that there are plenty of places consumers can shop without having to hand over a membership fee. So Costco is committed to keeping members happy. And there are different tactics the company uses to achieve that goal. Don't miss the move: Subscribe to TheStreet's free daily newsletter One is to keep its inventory exciting and fresh. There's a reason shopping at Costco is often likened to going on a treasure hunt. When you roam those aisles, you just never know what you're going to find. Related: Costco quietly drops popular product, saddens fans Costco also has one of the most reasonable and generous return policies in retail. With very limited exceptions, members can return any item whenever they want for a hassle-free refund. And of course Costco is known for its ultra-low prices on everything from groceries to household essentials to electronics. It's these low prices that help consumers justify the cost of a membership. What they pay to walk in the door, they make back in the form of savings during the year. Image source: Burbank/Orlando Sentinel/Tribune News Service via Getty Images Costco isn't the only retailer known for its competitive prices. Rivals like Walmart also have that reputation. But as the threat of tariffs looms, many consumers are wondering if retailers will be able to maintain their low prices. Not long ago, Walmart CEO Doug McMillon sounded a major warning on tariffs, stating that the company may have no choice but to raise prices in response to tariffs. Related: Walmart makes surprise cuts as it looks at tariff price hikes Companies like Walmart and Costco are better suited to minimize the blow of tariffs because of their giant footprints. But consumers may need to brace for higher prices, since Walmart recently made it clear that no retailer is immune to the impact tariffs could have. Costco, too, is aware that tariffs could have an impact on prices. During the company's most recent earnings call, CEO Ron Vachris said, "The impacts of tariffs and the outlook for the economy in general remain unknown." But Vachris also had some encouraging words on the matter. Costco, like its competitors, will need to work hard to minimize the impact of tariffs on consumers. But Vachris recently reassured investors that the company is well-prepared to manage tariffs. "We're remaining agile as a situation with tariffs evolves, while also supporting the commitments we've made with our long-term suppliers," Vachris said. "As an example of this, during the third quarter, we rerouted many goods sourced from countries with large tariff exposure to our non-U.S. markets." Related: Costco members angry over very personal product change Vachris also said the company was able to fill warehouse club shelves with some of its summer items sooner than initially planned to get ahead of tariff-related increases. Because Costco limits the inventory it sells, it has the flexibility to make changes and negotiate with suppliers as needed. That puts Costco in a prime position to minimize the impact of tariffs on members. "We are confident in the ability of our operators and merchants to rise to the challenges and continue to offer great service and find consistent values for our members," Vachris insisted. Another strategy Costco can use to work around tariffs is to fall back on its Kirkland Signature brand. Costco can make changes to how it sources Kirkland products, or introduce new Kirkland items, if the national brand becomes too expensive. More Retail: Walmart CEO sounds alarm on a big problem for customersTarget makes a change that might scare Walmart, CostcoTop investor takes firm stance on troubled retail brandWalmart and Costco making major change affecting all customers As Vachris told investors, "We continue to move more Kirkland Signature product sourcing into the countries or regions where the items are sold, and this has helped bring us to lower cost and mitigate some of the potential impacts of tariffs." Maurie Backman owns shares of Costco. Related: Trader Joe's makes a customer service decision Costco won't The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
7 days ago
- Business
- Yahoo
Costco takes a page from rival Sam's Club to speed up checkout in its warehouses with ‘Scan & Pay'
Costco is testing a feature that would allow customers to scan items in its warehouses and pay for them on their phones, following the lead of Walmart-owned rival Sam's Club. CEO Ron Vachris offered few details on the technology, but a guide on Costco's website said customers will receive a QR code after paying that they scan at a kiosk before exiting. Costco is turning to technology to get its customers out the door faster, a feature first pioneered by rival Sam's Club. On the company's fiscal third-quarter earnings call, CEO Ron Vachris said the company has been quietly testing technology that would allow customers to use their phones to scan items and pay, bypassing checkout lines and improving the speed at which customers can complete their purchases. 'We've also engaged in some 'Scan & Go done by Costco' kind of tests that we're doing out there that have been extremely successful of moving people through the lines and expediting the transactions,' Vachris said on the earnings call. 'We've seen some very, very early results that have been very positive and great adoption from our members—seeing that as well.' The name 'Scan & Go' is trademarked by Walmart-owned rival Sam's Club, which has been developing this type of checkout technology for years. An early version of the tech, which launched in 2013, allowed customers to scan their items in the app but required them to pay in the self-checkout lane. Later, Sam's Club allowed customers to pay for scanned items in the app, and is now looking to replace self-checkout lanes across the U.S. with the tech. Costco CEO Vachris offered few details about its version of the technology, but a guide on the Costco website explains its 'Scan & Pay' technology, offered in partnership with Instacart, is similar to that of Sam's Club. By scanning items' barcodes, customers build up a digital shopping cart which they can then pay for directly in the app and receive a QR code to scan at a 'Scan & Pay' kiosk before exiting. Costco did not immediately respond to Fortune's request for comment. Customers have long complained about the warehouse club's lackluster digital services and the fact it doesn't offer the scanning technology Sam's Club has developed for more than a decade. Now, Costco is apparently embracing the idea with 'several new technology pilots,' Vachris said. More than half of Costco members have downloaded the company's app, and chief financial officer Gary Millerchip sees the company's foray into 'Scan & Pay' tech as a growth area for the company. 'We still think there's plenty of opportunity to keep driving higher penetration of digital engagement with our members and we think it's got a runway to continue to grow in the future,' Millerchip said on the earnings call. This story was originally featured on Sign in to access your portfolio
Business Insider
7 days ago
- Business
- Business Insider
Costco CEO explains how the chain kept prices low as tariffs and egg costs hit retailers hard
Shoppers have faced higher prices due to tariffs and bird flu this year. Costco, meanwhile, has worked to avoid price hikes on many items thanks to a multi-pronged approach, executives said during the retailer's third-quarter earnings call on Thursday. As the threat of tariffs became real during the quarter, which included President Donald Trump's " Liberation Day," Costco brought in some merchandise for summer earlier than usual and purchased more US-made inventory, CEO Ron Vachris said during the call. The chain also rerouted some goods it had already purchased for its US stores to its locations abroad in order to avoid paying the tariffs. Costco's buyers have looked at specific items to figure out whether it can source US-made alternatives to suddenly more-expensive imports, Vachris said. "Is it something that we can replace with something domestically here, or is it something that we need to go ahead and move on quickly and bring in prior to any future tariff increases?" he said. Higher costs for some grocery staples, namely butter and eggs, also provided a challenge for Costco over the last few months. Besides being common purchases for Costco customers, those two items have a large "halo effect" on the costs of other goods that require them as ingredients, Vachris said. Costco's buyers talk to vendors regularly about lowering costs, the CEO said. "We're watching pricing daily, and if not hourly, on every key commodity," Vachris said. That doesn't mean that Costco is raising prices for those items, though. In fact, the chain's profit margins on specific products have taken a hit. Often, when the price that a retailer pays for an item goes up, stores raise the price that consumers pay in part or in full to protect their profit. That's exactly what many retailers did earlier this year when the cost of eggs skyrocketed as bird flu killed many egg-laying chickens and drove supply down. Costco said it avoided raising prices on eggs and butter as its costs for those things went up — leading some customers to line up early. The wholesale warehouse chain cut egg prices by 10% and butter prices by about 7% during its third quarter, CFO Gary Millerchip said on an earnings call Thursday. The retailer also held back on price increases on items that use those ingredients, Millerchip said. One example: The croissants in Costco's in-store bakeries. The company "held prices lower when butter costs were elevated," he said. As butter prices have fallen, Costco's profit margin on that item has expanded, Millerchip said. "In general, we feel margin pressure during times of inflation on these types of ingredients as we keep prices low for our members," Millerchip said. "And the opposite is often true when prices fall, as we feel the margin relief faster while also being able to lower prices more quickly than our competitors."
