Costco announced Wednesday that Chief Executive Officer W. Craig Jelinek is stepping down after more than 11 years at the helm.
Mr. Jelinek, 71, be succeeded by the company’s president and chief operating officer, Ron Vachris, who has been with Costco for more than 40 years.
Mr. Vachris, 58, was promoted to COO and president in 2022, making him Mr. Jelinek’s heir apparent. He is the second Costco insider to rise to the top job after Costco co-founder and CEO James Sinegal stepped down in 2012.
Mr. Vachris started with Costco as a forklift driver and worked his way into management. The Issaquah, Washington-based company said he has served in every major role related to Costco’s business operations and merchandising activities.
The changeover was “the culmination of the long-standing succession plan that Craig has discussed with the board,” Costco said in a statement. It will take effect Jan. 1.
Mr. Jelinek, who has been CEO of the members-only warehouse chain since 2012, is stepping down after years of strong sales growth at the company. He will remain with the company through April in an advisory role and will continue as a member of Costco’s board.
The company’s stock has increased five-fold during his tenure.
“We really run the company from being in the field,” Mr. Vachris said at the time.
“You may see things in the office, and we meet with a lot of suppliers and things look a certain way, but when you get out in the warehouse, that is where you get a sense of how it is really presenting, what is the response from the members, what are you hearing from the managers, how do the packaging, sizing and colors look.”
Third Largest US Retailer
The retailer has 861 warehouses in the world, including 591 in the United States and Puerto Rico. It is the third largest U.S. retailer behind Walmart and Amazon.Costco had around 66 million paid members and 119 million cardholders in 2022, making it one of the largest membership clubs in the world. Costco members pay either $60 for a regular membership or $120 for an executive card every year to shop at clubs.
The company has not raised the cost of its membership since 2017, despite rivals such as Amazon and Sam’s Club raising their membership fees. Costco has hinted it may soon raise its membership price.
This membership model is crucial to Costco’s business, which boomed during the pandemic as shoppers switched to more affordable options for daily essentials.
The fees help boost the company’s profit and offset expenses, allowing Costco to keep its prices down. Costco is known for offering some of the lowest prices in the retail industry.
