DR Barton, president of Woodshaw Financial Group, analyzes the consumer climate after Walmart’s strong earnings report in Varney & Company.
It will soon cost more to join the club.
Wednesday, Costco Wholesale Announced Plans The company will raise its annual membership fees in the United States and Canada by $5 to $10 starting Sept. 1, the first such move by the retail giant in seven years.
The company said annual membership fees were last increased in June 2017, with “Gold Star” and business memberships increasing by $5 to $65 and executive memberships rising from $120 to $130.
“The price increases affect approximately 52 million members, just over half of which are executive members,” Costco’s press release said.
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A customer hands a receipt to a door checker at the exit of a Costco Megastore in Queens, New York. (Lindsay Nicholson/UCG/Universal Images Group via Getty Images/Getty Images)
According to its website, Costco is “loved by more than 133 million members,” who enjoy perks including free samples to try, discounts on food, gas, home insurance, travel and groceries, and 2% annual rewards on eligible purchases at 882 warehouses around the world.
“Costco has kept prices low despite inflation,” Felipe Calo, a professor at the UCLA Anderson School of Management, told The Washington Post. “But they ended up having to raise membership fees. It makes sense to raise prices now, when customers are really seeing the value. Costco’s stock price rose after the announcement, so the market is acknowledging that it was the right decision at the right time.”
Costco reported net sales of $24.48 billion for the June 2024 retail month ending July 7, a 7.4% increase from 2023.
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A Costco store in Alhambra, California, USA, Thursday, June 27, 2024. (Eric Thayer/Bloomberg via Getty Images/Getty Images)
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| Fee | Costco Wholesale Co., Ltd. | 884.31 | -2.54 | -0.29% |
Membership fee revenue increased 7.6% in the third quarter of fiscal 2023. Membership fees accounted for 1.9% of the company’s total revenue for the year.
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Customers wait in line at a self-checkout at a Costco in Queens, New York. (Lindsay Nicholson/UCG/Universal Images Group via Getty Images/Getty Images)
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Costco rival Sam’s Club is raising its annual membership fees in 2022. The Walmart-owned retailer has lagged behind Costco in sales and recently announced that Plus members will only get free delivery if they make a minimum of $50 per order.
Reuters contributed to this report.
