Jim Sinegal reportedly blocked a proposed 3% across-the-board price hike to avoid normalizing price increases and protect Costco’s low-price reputation. Costco caps margins at 14% on national brands and 15% on Kirkland Signature, relies on membership fees, and posted nearly $250 billion in fiscal 2024 revenue with a 92.8% renewal rate.
Jim Sinegal, co-founder and former CEO, resisted a proposed 3% across-the-board price increase to prevent a gradual shift away from Costco’s core identity as a low-price leader. He likened the move to a business ‘heroin’ that would compel repeat hikes and erode customer trust.
Costco maintains strict margin caps—approximately 14% on national brands and 15% on Kirkland Signature items—and derives most of its profit from annual membership fees. This approach keeps shelf prices lower than competitors and reinforces loyalty.
In fiscal 2024, Costco generated nearly $250 billion in revenue while achieving a 92.8% renewal rate in the U.S. and Canada. High retention underscores consumer confidence in the company’s pricing strategy and value proposition.
Costco’s commitment to value is exemplified by its unchanged $1.50 hot dog-and-soda combo, a decades-old staple. Such initiatives signal consistency in pricing and strengthen the perception of trust among members.
