Costco wants to source more Kirkland products locally to avoid tariffs

Costco said it's looked to rerouting some of its supply chain to countries like Canada, while also sourcing out locally-produced products to avoid tariffs.

As U.S. President Donald Trump’s tariffs continue to impact companies globally, Costco says it’s trying to limit the hit by moving sourcing for in-house brands like Kirkland within the countries with tariffs.

During a third quarter earnings call last week, the company said it had seen US$62 billion in net sales, an eight-per cent increase from the same quarter last year.

Company executives said during the call they’ve been actively looking for ways to avoid impacts from tariffs, with chief executive Ron Vachris saying this included looking at its Kirkland brand and products sold at Canadian Costco locations.

“We rerouted many goods sourced from countries with large tariff exposure to our non-U.S. markets,” he said.

“We continue to move more Kirkland Signature product sourcing into the countries or regions where items are sold and this is helping us to lower costs and mitigate some of the potential impacts of tariffs.”

In addition, Vachris said the company also brought in items it had planned for summer earlier, while sourcing additional locally-produced goods to stay in stock and reducing that tariff impact.

Trump’s various tariffs have taken effect in the past few months, right in the middle of the third quarter.

Steel and aluminum tariffs, which can impact those that use aluminum and steel in their packaging of foods and other items, were imposed by Trump on Canada in March.