Costco Wholesale said Wednesday it will increase annual membership fees for customers in the U.S. and Canada for the first time in seven years, effective Sept. 1.
The retailer’s membership offers customers a variety of incentives, including free sample trials, discounts on food, gas, home insurance, travel and groceries, and 2% annual rewards on eligible purchases at its warehouses.
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.
Costco also announced that the annual 2% rewards given to executive members will be increased from $1,000 to $1,250.
The membership retailer said the price increases would affect around 52 million members, just over half of whom are executives.
The company’s shares have risen about 34% this year and were up 2.2% in after-hours trading.
“The market has been anticipating fee increases for several years, and management has historically tended to raise fees every five to six years,” said Michael Ashley Shulman, chief investment officer at Running Point Capital Advisors.
“This announcement will come as a welcome relief to those who have been waiting for it and should provide a solid upside to sales and the stock price,” Schulman added.
Membership revenue increased about 7.6% in the third quarter ended May 12. Membership revenue for fiscal 2023 will account for 1.9% of the company’s total revenue.
Meanwhile, Costco said Wednesday that its retail sales rose 7.4% to $24.48 billion in June.
