Costco has 11 stores across the world, but only two countries contain 82%. Canada is a country with a stable political climate and this means Costco shouldn’t have to worry about any sudden changes. Since the election of President Trump, political stability in the United States has declined. According to Fortune.com, this is due to Trump’s unpredictability. Costco may either lose their business due to the economic downturn or succeed because of its low-cost items. People will be more inclined to shop at Walmart for lower prices, without having to pay a membership. Costco is heavily reliant on imports and Trump plans to impose a tariff of up to 30% on goods imported.
Costco’s prices will increase by 20-30%. They will also be able to compete with the local products they sell. Costco has released a public statement that claims that the company is affected by Trump’s plans and that the increased tariffs will affect the prices for consumers. Costco must replace certain items with locally-sourced products, and regardless of whether the tariffs are increased or not. The membership fees could also be reduced to make up for the increase in prices. You can see on Costco’s website that they have made a big effort to work with farmers who are environmentally friendly and sustainable. This is evident in an article that discussed a farm where Costco plans to source millions of pounds chicken over the next few years. The article discusses the use of dry litter rather than wet manure by the farm to reduce waste runoff and improve waterway safety. They also require that growers have a Nebraska Department of Environmental Quality Permit. This is despite the fact that neither of these things are legally required. Costco’s commitment to ethical farming and sourcing of their products has been demonstrated in this way. Costco’s stance on insecticides is another way they have recently demonstrated their commitment to clean farming. Costco’s recent request to suppliers was noted in an article. Costco wants to show that it will protect the environment, and that is why they are following these new policies. Consumers will feel more confident and assured if they buy their products from ethical companies. Costco is involved in many lawsuits, and this latest case may be alarming for Costco customers as it threatens their health. Costco supplier Caito Foods LLC recalls all fresh-cut watermelon and honeydew melons that were distributed throughout the Midwest, Southwest and other regions of America in June 2018. Costco is concerned because salmonella has been found in several of their products before. Costco has escaped the brunt of the outbreak thanks to its legal team’s strength and liability laws. Costco is protected under the law because Caito Foods triggered the outbreak.
Costco would not be in danger if they were informed of this outbreak. Costco is not at fault in this case. Costco’s continued use of Caito food as a vendor puts them at risk of having another incident happen. Costco has a number of suppliers that they should cut due to their high number of recalls. Costco has a chance to increase their revenue. Their stock is up 32% since the election, compared to the 8% rise from 2015-2017. Costco has increased the wages of 130,000 employees as a result. Costco had a reputation for respecting their employees. But not many companies give back profits in this way. Costco’s minimum wage will be $14, compared to $7.85 for the national average. Costco has shown that it is a company with a high ethical standard and prides itself on treating its employees with dignity.
