On Tuesday, Costco announced that longtime finance executive Richard Galanti would be stepping down from his duties as CFO after nearly 40 years with the company. Since joining Costco in 1985, Galanti has successfully kept the retailer’s profit margins in the green, while also advocating for cut-rate prices and low membership fees on behalf of consumers.
According to the press release, Galanti will remain Costco's acting CFO until March 15, at which point he will transition into an advisory role through January 2025. Taking his place is former Kroger Senior Vice President and CFO Gary Millerchip, who will also serve as the new Executive Vice President of Costco.
RELATED: Shoppers Are Ditching Costco for Sam's Club Over New Membership Rules.
“Over his nearly forty-year tenure as chief financial officer at the Company Richard has made innumerable and invaluable contributions to its success. He is widely known, admired, and respected among our shareholders, employees, business partners, and others. We express our deepest gratitude for his long and loyal service,” Ron Vachris, Costco Chief Executive Officer, penned.
As Costco embarks on a new chapter, Vachris says he is confident that the company is in good hands. Millerchip has a background in both business and finance, having dedicated 15 years of service to The Kroger Co. and an additional 20 years prior in banking.
While Vachris and the company remain optimistic about the new changes ahead, several Costco members on Reddit shared that they have “a bad feeling” about Millerchip’s takeover and are concerned about whether his involvement could mean higher prices and increased membership fees.
“It’s the beginning of the end. We had a good run,” one person wrote.
Another commented, “Remember when we thought losing the Polish hot dog, combo pizza and fresh-made chicken bakes was the end of the world?”
Others are pointing out that Costco and Kroger’s business models are more dissimilar than they are alike and that the big-box chain may have been better off hiring from within company walls.
“Not good! Kroger and Costco are very different stores and business models. This is like taking a CFO from Pepsico (very conservative, commodity driven...think insurance) and putting them in charge of finances for a hip, culture driven company. Could be a disaster in the making,” someone argued.
“Of all the people in the world Costco could’ve found to work for them in the C suite….why Kroger’s CFO. Do you mean to tell me no one within their ranks had the ability, creds, and intelligence to take this position?” reads another response.
Reddit users who shop at both Costco and Kroger started to weigh in, with many noting that Kroger stores fail in comparison to Costco.
“Yeah, Kroger has been getting consistently [expletive] for the past 20 years to the point where I only shop at Costco and Aldi now, hate to see Costco bring in someone that was a part of that,” a person penned.
“Many of the Kroger stores in my area have gone downhill. It used to be a nicer place to shop!” said one worried shopper.
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In addition, Costco shoppers are worried about what this means for membership fees. Though Galanti said in December that a price hike was inevitable, he previously noted that the membership fee hadn't been raised since 2017—longer than the standard five-year time frame.
Galanti is also well known for his stance on keeping food court prices low. During a 2022 earnings call, he famously suggested that he planned to keep the $1.50 hot dog and soda combo "forever."
In the coming weeks, Galanti will be phasing out of his role while offering support to successor Millerchip. However, customers may be happy to hear that Galanti won’t be gone for good: He will be continuing on Costco's Board of Directors.
