Tariffs Have Forced Costco to Make a Huge Pivot for Holiday Shoppers

For shoppers browsing the aisles of Costco this holiday season, the product selection in stores may appear a bit healthier. That’s because the $378 billion big box chain, which consistently ranks as one of the most popular retailers among American consumers, is betting on the wellness boom, swapping out traditional holiday items, such as artificial Christmas trees and toys, for more health and beauty products, including indoor saunas. The company says that change in assortment stemmed from President Trump’s tariff policy. 

“We still have plenty of Christmas trees, just a smaller range,” Costco chief financial officer Gary Millerchip told the Wall Street Journal. “There are certain items that we just felt like, if we continued to sell them with the impact we’d have seen on tariffs, the value would not have been there for the member.”

Unlike artificial Christmas trees and toys, the vast majority of which are manufactured in China, health and beauty products tend to be made in the United States. Plus, the demand is there.

2025 became the year of self care with wellness ballooning into a $1.8 trillion industry, according to Forerunner Ventures. When the San Francisco-based, consumer-focused venture capital firm, which has a portfolio that has included Warby Parker, Away, Glossier, and Hims & Hers, released its annual consumer report back in March, it predicted that wellness, along with personal security, would be the two trends powering the consumer sector this year. 

That turned out to be a pretty prescient calculation. This past year, investors have piled into the sector. Daniel Lubetzky, the founder of Kind Healthy Snacks and one of the stars of Shark Tank, added Barry’s, the global fitness studio brand, to his portfolio. Venus Williams backed WeWard, an app that calls itself the Duolingo of walking. 

Within this space, saunas have been especially popular. Sun Home Sauna, a direct-to-consumer sauna maker, has grown revenue by 8,821 percent over the past three years—a rapid enough pace to surpass $25 million in sales in 2024 and land at number 20 on this year’s Inc. 5000. The San Diego-based company expects to hit more than $50 million in sales by the end of this year. 

Costco, which has been selling other brands of saunas online for years now, has approached Sun Home Saunas multiple times, according to co-founder Tyler Fish, who says that the company has declined for now.

“We’ve intentionally chosen not to pursue that channel,” Fish tells Inc. “Our strategy is to sell direct-to-consumer so we can fully own the customer relationship, education, and long-term ownership experience.”