Costco CEO says AI should assist employees, not replace them

Costco chief executive Ron Vachris drew a bright line for artificial intelligence: use it to help employees work faster, not to replace them. Speaking at The Economic Club of Chicago on May 11, he said AI had been “extremely good” for Costco in an assistive role, and that the company had used it in pharmacy, gas stations, accounting and some IT work, including code-writing.

That matters because Costco’s real test is not whether AI sounds modern. It is whether the technology eases the daily grind for the people on the floor, at the register, in the pharmacy, in the tire center and behind the scenes in warehouses that rely on speed and accuracy. Costco reported 341,000 employees as of Aug. 31, 2025, and the company’s 2025 annual report shows how many moving parts feed its business, from gasoline and pharmacy to optical, food court, hearing aids and tire installation.

Vachris also said Costco has not displaced people because the business has been growing faster. He said he does not see AI making choices on items for the retailer and does not expect AI to handle employee evaluations. That leaves the practical question for workers: does the software cut down on repetitive work, or does it just make the same workload move faster? Costco says comparable sales growth depends on increasing shopping frequency and average ticket, which helps explain why management would want tools that speed service without changing the company’s labor model.

Vachris’s own career path reinforces Costco’s people-first image. He began with the Price Company in the Phoenix market in 1982, became a warehouse manager in Colorado in 1992, moved up to vice president of operations in 1999, senior vice president of the Northwest Region in 2010 and executive vice president of merchandising in 2016. Costco named him president and chief operating officer in February 2022, and he became the company’s third chief executive in January 2024.

The Economic Club said the Chicago discussion, moderated by United Airlines executive Brett Hart, also covered Vachris’s early days as a forklift driver at Price Club, employee satisfaction and Costco’s small product selection. That fits the broader model Costco has long promoted: limited selection, efficient distribution and rapid inventory turnover. For a company with about 81 million paid members in fiscal 2025 and renewal rates around 92 percent in the U.S. and 90 percent globally, the message is clear. AI may be part of the warehouse future, but at Costco the work still appears to belong to people.