Rice lovers are rejoicing, it seems.
According to Costco Wholesale
COST,
CFO Richard Galanti, sales of 25- and 50-pound bags of jasmine rice are surging because shipping costs have come down.
“I mean this is just anecdotal because it was from our last budget meeting, with shipping costs coming dramatically down, on a 25- and 50-pound bags of jasmine rice, we’ve seen a big uptick in sales because that’s an item that really skyrocketed because it’s per pound, based on the size of the bag, it was a heavy freight cost. And so as that comes down, we see that going,” he told analysts, according to a transcript from S&P Global Market Intelligence.
The discount retailer on Thursday reported its fiscal second-quarter results, with the stock dipping in premarket trade as sales came in below Wall Street estimates.
Galanti says Costco’s estimated price inflation continues to ease: from 8% in the August-ending fiscal fourth quarter, to a 6% to 7% range in the fiscal first quarter, and down to 5% to 6% range in the fiscal second quarter. “We continue to see some improvements in many items,” he said.
Costco is seeing weakness in big-ticket items, which he attributes both to the economy as well as the strong numbers seen during COVID, though he said televisions are seeing “decent sales” with average selling prices coming down. But average transactions and shopping frequency is up.
Galanti continued to say that Costco will at some point raise its membership fee. June will be the sixth anniversary of the last time it raised that cost.
“And what we said over the last few quarters is that, in our view, it’s a question of when, not if. And so we’ll let you know. But keep in mind, that’s one way that we become even more competitive. We take those monies and directly become even more competitive,” he said.
