Costco's sustainability efforts do not increase pricing to members, are 'consistent with our efforts to lower costs,' says company's CEO

Cindy Allen

BELLEVUE, Washington , January 29, 2013 (Supermarket News) – Costco Wholesale Corp. told shareholders it does not believe its sustainability efforts increase pricing to members, despite claims to the contrary from a shareholder at its annual meeting here last week.

"We are not in business to increase prices," Craig Jelinek, chief executive officer, told the shareholder. "What we always try to do is reduce costs, and we believe by and large that most efforts we engage in are consistent with our efforts to lower costs."

Jelinek made his comments in response to a question asked by Justin Danhof, who said he was representing the National Center for Public Policy Research, which he described as "a free-market think tank." Danhof referred to sustainability as "extreme environmentalism."

According to Danhof, Costco, as a member of the Retail Industry Leaders Association, is asked to follow a sustainability campaign that calls for it to make "unaffordable capital expenditures that do not have prospects for a reasonable payback. Our concern is that this push for so-called sustainability will harm Costco's shareholders, suppliers and customers as they will bear the cost of these self-imposed green regulations.

"Do you think it is fair to charge low- and middle-income Americans more for products because Costco and other retailers want to green-wash their images?" he said, calling on Costco to reject initiatives dealing with sustainability "to reduce the company's bottom line."

In his response, Jelinek gave a couple of examples of sustainability efforts that reduce costs, including the use of solar panels on warehouse roofs "that allow us to spend less on electricity," as well as recycling grease from chicken rotisseries for sale to renderers.

© 2013 Penton Media

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