Costco Announces Membership Fee Increase for First Time in Seven Years
- Costco plans to raise its membership fee for both gold and executive options starting September 1.
- This will be the first increase in membership prices in seven years, reflecting rising operational costs.
- Potential members are advised to join before the fee hike takes effect.
Costco Wholesale has revealed plans to raise its annual membership fees by $5 to $10 in the U.S. and Canada, effective September 1. This marks the first increase since June 2017. The new fees will see "gold star" and business members paying $65, while executive members will see their fees rise from $120 to $130. The company estimates that approximately 52 million memberships will be affected, with over half being executive memberships. The decision to increase fees comes amid rising inflation, although Costco has managed to maintain low prices for its products. Felipe Caro, a professor at UCLA Anderson School of Management, noted that the timing of the fee increase aligns with the perceived value customers find in Costco's offerings. Following the announcement, Costco's stock price experienced a rise, indicating market approval of the decision. In its recent financial report, Costco reported $24.48 billion in net sales for June, reflecting a 7.4% increase compared to the previous year. Membership fees contributed to a 7.6% rise in revenue during the third quarter of fiscal 2023, accounting for 1.9% of the company's total revenue for the fiscal year. This fee adjustment comes as competitors like Sam's Club have also raised their membership fees in the past year, highlighting a trend within the retail sector.