Costco just got its dream economy

Americans are feeling increasingly uneasy about the economy.

Consumer sentiment has been alarmingly weak, according to recent University of Michigan sentiment readings. At the same time, inflation has soared since the Iran war broke out.

In April, the Consumer Price Index rose 3.8% on a year-over-year basis. There were notable spikes in not just gasoline and fuel oil, but also food, shelter, and apparel.

At the same time, April’s jobs report was a mixed bag. While job gains exceed expectations, many of them came within the health care sector, which economists don’t weigh as heavily when measuring broad growth.

The combination of weakening sentiment and sky-high prices has forced consumers to become more cautious about how they spend money. And many are reducing their spending on nonessentials in an effort to stay afloat.

That kind of environment creates serious problems for many retailers, restaurants, and discretionary brands. But for Costco, it may actually be the perfect setup.

Costco continues to post impressive sales growth

At a time when consumers as a whole are spending less, Costco is thriving. The warehouse club giant delivered another strong month of sales growth in April, despite growing economic concerns on a national level.

According to the company’s latest monthly sales report, net sales came to $23.92 billion for the retail month of April, an increase of 13% from $21.18 billion last year. And during the company’s most recent quarter, comparable sales rose 7.4% year over year.

Related: Costco adds popular item to food court menu

When consumers start worrying about the economy, they typically become much more focused on value. Shoppers tend to cut back on impulse purchases, dine out less often, and prioritize bulk buying to stretch their budgets further.

That’s where Costco tends to thrive.

The warehouse giant has built its business around offering lower prices and a treasure-hunt shopping experience that keeps customers coming back, even during periods of economic uncertainty. And lately, that strategy appears to be paying off in a major way.

Costco says shoppers remain focused on value

Costco executives have made it clear that consumers are becoming more deliberate with their spending.

“Members are very focused on quality and value,” CFO Gary Millerchip said during the company’s second-quarter 2026 earnings call.

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That focus has helped Costco maintain strong traffic even as many retailers report softer demand.

The company also noted that shoppers are responding well to lower prices on key grocery items and private-label products, helping drive repeat visits and larger transactions per visit.

Of course, Costco’s membership model gives the company a major advantage during uncertain economic times. Consumers who already pay for a membership often feel incentivized to maximize the value they get from shopping at Costco, particularly when prices elsewhere remain elevated.

The company’s Kirkland Signature private-label brand has also become a major draw for budget-conscious shoppers looking for cheaper alternatives to national brands without sacrificing quality.

“Kirkland Signature remains a top focus to deliver great value for our members, with KS items typically offering 15% to 20% value compared to the national brand alternative, with equal or better quality,” Millerchip said during the call.

And as retail expert Zel Bianco recently told RetailWire, “Given that so many families are struggling with the crazy high prices of almost everything they need today, it’s no wonder that Costco and the Kirkland brand continue to grow.”

At a time when many retailers are struggling to convince consumers to keep spending, Costco may be one of the few major chains actually benefiting from growing economic uncertainty.

And while it’s hard to know what the next few months have in store, it’s pretty fair to say that Costco is in a great position to thrive.

Maurie Backman owns shares of Costco.

Related: Costco leans into new consumer dining trend

This story was originally published by TheStreet on May 16, 2026, where it first appeared in the Retail section. Add TheStreet as a Preferred Source by clicking here.