Your next Costco run could be more expensive as the company warns of expected price hikes for key goods, including trash bags, cheese, plastic plates, and beef

By Áine Cain

Costco Chief Financial Officer Richard Galanti called out rising inflation in the big box company's Thursday earnings call, noting that selling prices for staples like paper goods, meat, cheese, and trash bags are up.

Galanti rattled through a number of "inflationary soundbites" with analysts on the call and shared a number of products experiencing spiking prices, as well as the reasons for rising costs.

He said that "items shipped across the ocean" have seen "suppliers paying up to double for containers and shipping." Cheeses in particular are curdling consumers' wallets, in part due to freight costs and the strength of foreign currencies. Mid-single-digit cost increases for metals and aluminium foil could leave a bad aftertaste for shoppers seeking sodas and other canned beverages.

A post-pandemic wardrobe refresh could also become more expensive; Galanti said that certain apparel items are up 3% to 10%. Computer chips, oils, and chemical supplies could see spikes, thanks to product shortages. Paper products could cut into budgets, as rising pulp prices send prices surging 4% to 8%. Meat is increasingly expensive, rising 7% year over year. Carnivores could get hit with a 20% surge for certain beef products in the last month, according to Galanti. 

"Some of that is due to feed and labor and transportation costs, as well as restocking," Galanti said. "Some of the additional increased demand is coming now from institutional needs, as restaurants start to reopen."

Galanti also listed out other general  "inflationary pressures," including higher labor costs, higher freight costs, higher transportation demands, container shortages, port delays, and an increased demand for specific product categories.

And anyone looking to take out the trash during spring cleaning is also out of luck. Galanti said that price increases for plastic and resin could see a price uptick for trash bags and plastic wraps, cups, and plates.

The Costco CFO said that in the company's previous earnings call, he said his "best guess" was that inflation was running in the one to one-and-a-half percent range. That's since gone up.

"As of today, we guess that overall price inflation at the selling level — and excluding our gasoline sales — would be estimated to be probably more in the two and a half to three and a half percent range," Galanti said. "Some items are up more. For some items, the sell prices haven't yet changed. Some items are even down a little bit."

Galanti added, "We think we've done pretty well in terms of controlling that as best we can, but the inflation pressures abound."