Costco Wholesale Corp. is raising motor oil prices and limiting purchases as supply pressure builds in energy markets. The bulk seller of common products through its membership warehouses is making what amounts to a tiny adjustment within its huge business, but the timing makes it worth watching. Energy markets have been under pressure, and rising oil prices could eventually reach consumers at the gas pump, in shipping costs and on store shelves. Costco's reputation rests largely on keeping prices low for members, so when costs rise the company must decide how much of the increase to absorb and how much to pass on to buyers. The purchase restrictions suggest Costco would rather keep goods on hand than risk some consumers buying exceptionally large amounts. The key question is whether this is an isolated incident; if similar price increases surface on more products, Costco buyers could feel rising energy costs far more broadly, which is the next thing investors should watch.
Costco Wholesale CorpCostco is raising motor oil prices and limiting purchases as supply pressure builds, a cost/margin pressure event on its own product pricing.
