U.S.-based membership-only retail chain Costco (COST) has dodged a nationwide strike after Teamsters agreed to a tentative deal. The last-minute deal has temporarily prevented a historic strike at Costco, which would have been the largest in U.S. retail history and the first for the company. Notably, the Teamsters union represents over 18,000 Costco employees, which is around 8% of the company’s workforce in the U.S.
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Though the Teamsters represent workers at only a small number of Costco stores, they were ready to set up barriers at non-union locations across the country, even if those workers stayed on the job. The union has over 1 million members in the U.S. who could support the action.
Costco Averts Strike for Now
With the deal announced just hours after the contract expired at midnight on Friday, Costco has averted the strike for now. However, a strike is still possible until union members vote to approve the agreement before it takes effect. While most tentative deals lead to final contracts, approval isn’t guaranteed.
The deal follows Costco’s recent announcement of a pay hike for most U.S. hourly workers amid ongoing union contract talks. Under the new compensation, most U.S. store workers will earn over $30 an hour. Additionally, top-tier employees get a $1 raise in March to $30.20, with another $1 hike each year for two years. Lower-paid roles see a $0.50 per hour increase.
The pay hike came after the union recently voted to initiate a nationwide strike. In addition to wages and benefits, the union sought improvements in seniority pay, paid family leave, bereavement policies, sick time, and protections against surveillance.
Is it Good to Buy Costco Stock?
As per the consensus rating on TipRanks, COST stock has a Moderate Buy rating, supported by a total of 24 recommendations. It includes 16 Buys and eight Holds. The Costco share forecast is $1,058.58, which is 8.03% above the current price level.
Year-to-date, COST stock has gained nearly 7%.
