Most Americans have some fear over the state of the economy.

Even though the job market has ostensibly been very strong, it has been challenging for many former high-earners to find new positions. When you see wide cuts at major technology companies, those a high-paying jobs being lost which may not be easy to replace.

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In addition, many Americans remain concerned over inflation and high prices. That’s something that President Donald Trump’s looming threats of tariffs has further exacerbated.

Americans do seem to understand that tariffs will be paid by them, and not foreign countries. Some huge companies like Walmart and Costco will eat some of those costs and maybe be able to force their vendors to do the same.

Despite that, prices are going to rise and that’s something which has many Americans tightening their hold on their wallets.

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You would think that major retailers would be worried about this — and many are — but Costco CFO Gary Millerchip has a very unique view of what’s happening. His comments either speak to the trust Costco members have in the brand, or that many people are more confident in the economy than you may have been led to believe.

Costco members have not really changed their buying patterns.

Image source: VIEWpress/Getty Images

Costco customers have not done anything different

While many Americans may be worried about the finances, Costco members have not acted any differently.

“We’re not really seeing any change in what we’ve seen around our members over the last really few quarters,” Millerchip said during Costco’s second-quarter earnings call.

He does believe that members are putting more thought into their purchases.

“We believe that the member is probably as much focused now on quality, value and newness as they have been for quite some time. But they are still showing that willingness to spend, but they’re being very choiceful where they’re spending their dollars,” he added.

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Millerchip believes that shoppers will become even more protective of their dollars.

“And we think that’s likely to continue and maybe even become more choiceful as the impact of some return of inflation and the potential impact of tariffs could flow through as well. I’d say we’re also seeing a continued sign of what I mentioned last quarter, where there’s some indication that members are spending a little bit more on food at home versus food away from home overall,” he said.

Costco focuses on three key themes

“When we talk about individual categories, I would say on nonfoods, again, I think you characterized it well for us. Our merchants have done a great job of really focusing on those three key themes that we hear from our members around bringing in great items at great quality and great value,” Millerchip shared.

He made it clear that the chain has not seen changing trends in big-ticket purchases.

“And while there are examples of that with newness around things like gold and some of the large electronic and gaming items I mentioned, we’re really seeing it being fairly broad-based across all the categories that I listed on the call earlier,” he added.”So generally, we’re continuing to see strong trends overall in nonfoods. 

Not every category has been growing.

“There are a couple of categories generally that have been flatter, I would say, over recent quarters, consumer electronics and apparel. We believe we’re performing relatively well on those compared to the industry, but they are lower trends on those items than there would be in some of the other categories that I mentioned earlier. And we’re seeing, as I mentioned in some of the prepared remarks, we continue to see great trends in fresh products overall’ the CFO said.

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Costco has also seen members indulge and look to save money.

“We’re still seeing really good growth on the more premium meat items, but we’re seeing even faster unit growth, I would say, on some of the lower-cost cut items like ground beef and poultry and pork. So overall, I think the trends that we’ve seen, we’re not really calling out anything significantly different,” Millerchip added.