Costco CEO Craig Jelinek to step down, hand the reins to longtime insider

Costco CEO Craig Jelinek will step down after more than 11 years of holding the reins of the Issaquah-based retailer, the company said Wednesday.

Costco’s board of directors selected Ron Vachris, the company’s president and chief operating officer, as the next CEO. Vachris has been with Costco for more than four decades.

“This is the culmination of the long-standing succession plan that Craig has discussed with the Board,” Costco said in a statement.

After 39 years at the company, Jelinek, 71, will step down as CEO on Jan. 1. He will remain with Costco until April in an advisory role assisting Vachris with the transition. Jelinek will also stay on the board and stand for reelection at the company’s annual meeting in January.

Vachris, 58, has been with the company for more than 40 years. His appointment makes him the second Costco insider to climb to the top job after Costco co-founder and CEO James Sinegal stepped down in 2012.

Vachris began his career there as a forklift driver and moved to serve in major roles in business operations and merchandising, according to Costco.

Among his roles at Costco, Vachris was executive vice president of merchandising from June 2016 to January 2022, senior vice president of real estate development from August 2015 to June 2016 and senior vice president, general manager of the Northwest Region, from 2010 to July 2015.

Vachris and Jelinek worked together in their most recent roles for nearly two years.

“I have total confidence in Ron and feel that we are fortunate as a company to have an executive of his caliber to succeed me,” Jelinek said in a statement.

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Jelinek, who originally started as a store manager, was the company’s president and chief operating officer when he took over from Sinegal in 2012. During his tenure as CEO, the total of Costco warehouses increased from 617 to 861 in the U.S. and internationally.

In the most recent fiscal year announced in September, Costco revenues were $242.3 billion, an increase of 6.8% compared to the previous year. In 2012, the company reported $99 billion in revenue.

Costco’s competitor Sam’s Club, which is owned by retail giant Walmart, is about a third of Costco’s size. It reported $84.3 billion in annual sales in February. But Sam’s Club sales grew at a faster rate of 14.7% from the previous year.

Jelinek never changed the price of Costco’s famous $1.50 hot dog despite inflation because Sinegal said he would “kill” Jelinek if hot dog prices went up, the now-departing CEO jokingly told the audience during an Issaquah Chamber of Commerce luncheon in 2018.

Still, Costco’s chief financial officer Richard Galanti said in September that it was a matter of time until Costco increased membership prices. During Jelinek’s tenure, Costco increased membership fees in 2017, when the Gold Star as well as Business, and Business add-on memberships became $5 more expensive.

Costco had a 7.6% increase in memberships from fiscal year 2022 to fiscal year 2023.

Costco shares decreased 0.63% in after-hours trading after the news of Vachris succeeding Jelinek.

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