Costco (NASDAQ: COST) faces a potential labor stoppage next week that threatens to bring its operations to a halt in parts of states like California and New York.
Unionized Costco workers voted on Sunday to approve a strike starting on February 1 if the retail giant does not agree to demands for improved wages and benefits.
The decision comes amid protracted talks between Costco and its Teamsters-unionized employees over their collective bargaining agreement. Known as the Costco Teamsters National Master Agreement, it expires on January 31.
Without a fresh agreement, the union can authorize a strike — and that would leave dozens of Costco warehouses across the country with many or most of its employees.
Costco Union Wants a Better Deal As Profits Soar
Costco Teamsters say their demands include concessions on seniority, paid family leave, and “safeguards against surveillance.”
The labor union has not made its specific asks public. However, it has delivered an ultimatum to the $400 billion company.
Teamsters General President Sean O’Brien warned this week, “Costco must deliver a fair contract, or they’ll be held accountable.”
The union says workers should reap some of the spoils of the company’s robust 2024 performance.
Costco reported $254 billion in annual revenue and $7.4 billion in net profits for its 2024 fiscal year, which ended on September 1.
Costco also raised its fees for its two tiers of membership in September by 8%.
The company’s stock has surged over 36% in the past year, consistently beating analysts’ estimates and retaining a consensus buy rating.
Contesting Costco’s Image
Costco has long enjoyed a reputation for treating its workers well, offering industry-leading starting salaries and benefits, including generous paid time off.
However, some employees claim that this no longer reflects the company’s current reality. They allege that while Costco has increased starting wages amid a more competitive labor market, wages for experienced workers have not kept pace.
In July 2024, Costco raised its starting wage to $19.50 for all entry-level employees in the United States and Canada, with pay step increases bringing the average hourly rate to nearly $31, according to the company. That translates to an annual salary of over $60,000.
Costco’s workforce critics say shareholder value has taken precedence over employee satisfaction. However, the company reports an employee retention rate in the 90-percent range.
California Would Be Hit the Hardest by a Costco Strike
Only 56 of Costco’s 616 U.S. warehouses — or roughly 18,000 of its 219,000 domestic workforce — are unionized.
Most of the unionized warehouses are former Price Club locations in California, Maryland, New Jersey, and New York. The two competitors merged in 1993.
The potential labor shutdown would hit California the hardest. The state is home to 40 unionized Costco locations, 27 of which are in Southern California.
An additional fourteen are in Maryland, New Jersey, and New York — including in the suburb of Long Island. Costco’s newest unionized locations are in the Virginia cities of Glen Allen and Norfolk.
Costco’s fleet drivers in the state of Washington are also members of the Teamsters union.
Should unionized workers for Costco contractors and service providers, including UPS, obey the strike and not service the company — it could compound the effect.
It’s unclear whether all employees at unionized locations are required to be union members and whether distribution centers will join the strike.
Globely News reached out to the Teamsters, but did not receive a reply at the time of publication.
Partial List of Unionized Costco Locations That Could Be Disrupted by a Strike
California
Alhambra – 2207 W. Commonwealth, Alhambra, CA
Azusa – 1220 W. Foothill Blvd., Azusa, CA
Burbank – 1051 Burbank Blvd., Burbank, CA
Carmel Mountain – 12350 Carmel Mt. Rd., San Diego, CA
Carlsbad – 951 Palomar Airport Rd., Carlsbad, CA
Chino Hills – 13111 Peyton Dr., Chino Hills, CA
Chula Vista – 1144 Broadway, 895 East “H” St., Chula Vista, CA
Coachella Valley – 72800 Dinah Shore Dr., Palm Desert, CA
Corona – 480 McKinley St., Corona, CA
Fountain Valley – 17900 Newhope St., Fountain Valley, CA
Fullerton – 900 South Harbor Blvd., Fullerton, CA
Inglewood – 3560 W. Century Blvd., Inglewood, CA
Irvine – 115 Technology Dr., Irvine, CA
Monterey Park – 2000 Market Place Dr., Monterey Park, CA
Moreno Valley – 12700 Day St., Moreno Valley, CA
Northridge – 8810 Tampa Ave., Northridge, CA
Norwalk – 12324 Hoxie Ave., Norwalk, CA
Oxnard – 2001 East Ventura Blvd., Oxnard, CA
Rancho Cucamonga – 11800 4th St., Rancho Cucamonga, CA
San Diego – 4605 Morena Blvd., San Diego, CA
San Diego – 650 Gateway Center Dr., San Diego, CA
San Juan Capistrano – 33961 Doheny Park Rd., San Juan Capistrano, CA
San Marcos – 725 Center Dr., San Marcos, CA
Santa Clarita – 18649 Via Princessa, Santa Clarita, CA
Santee – 101 Town Center Pkwy., Santee, CA
Signal Hill – 2200 Willow St., Signal Hill, CA
Vista – 1755 Hacienda Dr., Vista, CA
Yorba Linda – 22639 Savi Ranch Pkwy., Yorba Linda, CA
New York
Westbury, Long Island – 1250 Old Country Rd., Westbury, NY
Globely News covers the game changers transforming the worlds of business, sports, politics, and technology. From AI and electric vehicles to the rise of China and the NFL's next stars, we've got you covered.