Indications that economic growth might be stalling is revealing itself in the stutter of commodity and equity markets, giving way to the concern of inflationary pressure. Retailers such as Costco Wholesale Corp. (NasdqGS: COST) are still seeing strong demand for their merchandise, but have been dealing with broad inflation for products across the board.

Retail exchange traded funds (ETFs) may feel sluggish as inflationary pressure wrestles with consumer demand, and tries to come to a happy medium. “Everything from dry dog food up 3.5%, to all your detergents of 10% plus, to various waters 10% or so, to all your plastic, your plates and your plastic cups and everything, 8% to 9%,” Mr. Galanti, Cheif Financial Officer for Costco said. “We’re fighting to keep them lower, keep them delayed.”

While fundamental business is strong, the only segment to see slower sales are electronics, during the past quarter, reports Karen Talley for The Wall Street Journal. The company will not compromise with cheaper products to quell customers reactions to higher prices. Costco profit was set at $324 million for the fourth quarter. [Retail, Consumer Staples ETFs Down After Costco Miss.]

HOLDRS Retail (NYSEArca: RTH) invests 5.9% into Costco; it is down 1% over the past week and is up 12% over the past year. SPDR Consumer Staples Select Sector Fund (NYSEArca: XLP) invests 3.1% of assets into Costco; it is also down 1% over the past week and is up 21% for the past year. [Investors Play Defense with Consumer Staples ETFs.]

Tisha Guerrero contributed to this article.

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