Why Costco is saving $20 billion on its food in 2018
Costco is planning to reduce its food costs for the first time in more than a decade.
The savings will be available to shoppers and employees.
Costco said on Wednesday that it is cutting its food prices in 2018 to $18.50 per bag, a 25 percent reduction.
The move is part of a broader effort to improve efficiency and cut costs.
Costco expects to pay its food department $25 billion in 2018, a $4.5 billion cut from the previous year.
Costco also said it will spend $15 billion on food and food services, including $2 billion on the company’s food manufacturing plant in Ontario.
Costco had reported a $2.8 billion loss for the year, the company said in its first-quarter financial report.
The company said the 2018 loss was “the most since the company began offering annual results in the first quarter of 2018.”
The company is on track to post a $10.3 billion profit for the fiscal year that starts Oct. 1.