Costco quietly lowered prices on key items | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

As someone who now shops at Costco on a weekly basis, I have a confession to make. When I first learned about the store’s business model, I wasn’t impressed.

I think my initial reaction went something like, “You mean to tell me you’re going to charge me a fee just so I can walk in the door and spend money?”

I’m certainly not the only person to utter such a statement.

There are many consumers today who refuse to shop at Costco because they don’t believe in spending money just to get into a store. And that’s understandable.

But what helped me get over that hump was actually taking a walk through a Costco store as the guest of a member (who, incidentally, happens to now be my husband) and actually checking out the prices.

It only took a single stroll through that massive warehouse for me to realize that what I paid for an annual membership, I could easily make up for in a couple of shopping trips.

Part of the savings, of course, comes in the form of bulk discounts. But Costco has other strategies it can use to keep its prices down, and the company doesn’t hesitate to use them.

Costco quietly lowered prices on key items.

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Costco aims to have the lowest prices in retail

Costco certainly has a reputation for offering low prices. And nobody puts more pressure on the company to do that than Costco itself.

During the company’s Q2 2025 earnings call, Costco CFO Gary Millerchip said, “We really tend to view ourselves as our own biggest competitor. Every period, we have our budget meetings and we look at our prices, and our goal at every meeting is to find, where can we find ways to lower cost and lower prices for our members?”

Costco actually has a number of strategies it uses to keep prices low for members.

For one thing, because it makes a lot of money off of membership fees, it can accept lower margins on individual products throughout the store.

On top of that, Costco typically limits its inventory to about 4,000 SKUs (stock-keeping units), which is well below the 30,000 to 50,000 SKUs you might find in a typical grocery store. This allows Costco to negotiate lower prices with suppliers and pass that savings along to consumers.

Finally, Costco’s private label Kirkland Signature brand allows the company to produce high-quality products at a lower price than its competitors. And since Costco owns the brand, there are no middlemen or marketing markups.

Costco just lowered prices on key items

Costco doesn’t always make a big show about lowering its prices.

Because that’s such a core part of the company’s strategy, Costco would rather quietly bring prices down when it’s able to and let members enjoy the savings.

During the company’s most recent earnings call, CFO Gary Millerchip said, “As always, our goal is to be the first to lower prices when we see opportunities to do so.”

Costco items whose prices fell during the most recent quarter

Kirkland Signature chicken pot pie fell from $4.29 to $3.99 per pound.
Kirkland Signature bacon dropped from $18.99 to $16.99 per packet.
Kirkland Signature whipped cream three-packs fell from $10.49 to $8.99.
Kirkland Signature three-pound walnut bags dropped from $14.49 to $12.99. Source: Costco Q1 2026 earnings call

It’s not a coincidence that some of Costco’s biggest price reductions stemmed from its store brand.

Costco is routinely able to offer its Kirkland Signature products at a price point that’s at least 20% below the price of national brands. But when Costco can do even better, it tries to.

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So if you’re wondering if a Costco membership is worth it given the fee to get in the door, just ask yourself if your go-to supermarket or big-box store is as committed to lowering prices as Costco is.

And let’s face it – part of it is a matter of pride. Costco has worked hard to attain a certain reputation, and it wants to keep it.

But if that obsession with having the lowest prices in retail works to your benefit, then why argue with it?

Maurie Backman owns shares of Costco.