DR Barton, Principal at Woodshaw Financial Group, analyzes the state of the consumer after Walmart’s strong earnings report on “Varney & Co.”
It will soon cost more to be a member of the club.
On Wednesday, Costco Wholesale announced plans to raise annual membership fees from $5 to $10 in the United States and Canada, starting Sept. 1. It’s the first time in seven years that the retail giant has done so.
The annual fee, last increased in June 2017, would rise by $5 to $65 for Gold Star and professional members and to $130 from $120 for executive members, the company said.
“The fee increases will impact approximately 52 million members, just over half of whom are executive members,” Costco’s press release said.
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A customer hands a receipt to a door check employee at the exit of the Costco megastore in Queens, New York. (Lindsey Nicholson/UCG/Universal Images Group via Getty Images / Getty Images)
Costco’s website states that the company is “loved by more than 133 million members.” Some of the benefits they receive include free sample trials, discounts on food, gas, home insurance, travel and groceries, and an annual 2% reward on eligible purchases at its 882 warehouses worldwide.
“Despite inflation, Costco kept its prices low,” Felipe Caro, a professor at UCLA’s Anderson School of Management, told the Washington Post. “But membership fees eventually went up, and it makes sense to do so now that customers are really aware of it. Costco’s stock price went up after the announcement, so the market agrees that it was the right decision at the right time.”
Costco reported net sales of $24.48 billion in the retail month of June 2024, which ended July 7. That figure represents a 7.4% increase from 2023.
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A Costco store in Alhambra, California, United States, on Thursday, June 27, 2024. (Eric Thayer/Bloomberg via Getty Images/Getty Images)
| Teleprinter | Security | Last | Change | Change % |
|---|---|---|---|---|
| COST | COSTCO WHOLESALE CORP. | 884.31 | -2.54 | -0.29% |
Membership fee revenue increased 7.6% in the third quarter of fiscal 2023. Membership fees represented 1.9% of the company’s total revenue for the year.
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Customers in self-checkout lines at Costco, Queens, New York. (Lindsey 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 trails Costco in sales and recently announced that its Plus members will only get free shipping if they reach a minimum threshold of $50 per order.
Reuters contributed to this report.
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