The down economy has caused a major shift in consumer spending. As shoppers cut back on how much they spend, they've become much more selective about where they spend those dollars — looking specifically to retailers that can offer the best deals. That led to increased competition among many stores. Richard Galanti, chief financial officer at Costco, which has seen steady growth of shoppers in its stores during the downturn, discusses the issue in a conference call with investors on Wednesday.

QUESTION: As you are aware, BJ's reported earnings this morning and they talked about an increasingly competitive environment. Can you maybe discuss what you are saying from a competitive standpoint?

RESPNOSE: Well, I think there is, when you talk about competition, there are two things that we are always asked about. One is all the supermarket chains over the last many months have talked about much more promotional increased competitive market. On top of the fact that there had been deflation in a lot of those categories that supermarkets are selling during those many months, our position hasn't really changed.

While certainly the food buyers look at the weekly ads for ground beef and soda pop and the like, those are items that are probably lower than average margin items to begin with for us. We really don't feel a great impact from that. We don't generally price to that.

Within the big-box stores — both the direct competitors Sams and B.J's — as well as the indirect ones, like you know, Target and Wal-Mart and Home Depot and Lowes, we have not seen any increase in the bar of competition.