US wholesaler Costco said rising costs and fierce competition had trimmed its fourth quarter income by 3% but full-year sales were ahead by 10%.

For the year to August 31 sales rose to $41.7bn from $38bn, while income before tax was flat at $1.16bn.

To curb rising costs Costco has asked employees to contribute 8% to their health benefit scheme up from 4.5%.

Costco also said that it had acquired French retailer Carrefour’s 20% equity stake in Costco’s UK business that operates 15 depots. A further two sites are planned to open before the end of 2004, the company added.

Costco entered the UK market in 1993.