Costco Announces Membership Fee Increase for First Time in Seven Years
- Costco is set to raise membership fees starting September 1, marking the first hike in seven years.
- Both gold and executive membership options will see an increase in price.
- Potential members are encouraged to sign up before the fee increase 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 keep product prices low. 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 latest 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 follows a similar move by Costco's competitor, Sam's Club, which raised its membership fees in 2022, highlighting the competitive landscape in the retail sector.