Costco is raising membership fees for the first time since 2017

Costco customers will see their membership fees increase for the first time since 2017, the company said Wednesday, a move it hopes will boost profits without scaring away its loyal customer base.

Starting September 1, Costco Gold Star, Business, and Business add-on members in the United States and Canada will pay $65 for an annual membership, down from $60.

Executive members will be charged $130, an increase of $10 per year. The move will affect 52 million members, “just over half of whom are Executive,” Costco said in a press release. Executive members will get up to $1,000 in rewards for their purchases. The maximum rewards will increase to $1,250 with the fee increase, the company said.

The fee hike comes even as Costco defends its image as a place to find cheap bulk goods in an economy struggling with inflation. During an earnings call in late May, Gary Millerchip, the company’s chief financial officer, told investors that Costco’s hot dog and soda combo would still sell for $1.50 — a price that hasn’t changed since the 1980s — a move that drew widespread applause.

Millerchip also said during the May call that he would not rule out a fee increase, adding that Costco considers raising its fee about every five years.


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“Costco has kept prices low despite inflation,” said Felipe Caro, a professor at the UCLA Anderson School of Management. “But the membership fee eventually had to go up, and it makes sense to do it now, when customers are really seeing the value. Costco’s stock price went up after the announcement, so the market agrees it was the right thing to do at the right time.”

Costco shares rose more than 2.5 percent after the announcement.

The company posted net income of $1.68 billion for the 12-week period ended May 12. That figure includes $1.12 billion in membership fees it brought in during the quarter. Costco earned nearly $4.6 billion in annual membership fees in the fiscal year that ended in early September, an 8 percent increase from the prior year.

However, according to Dinesh Gauri, a marketing professor at the University of Arkansas, the added costs can hinder Costco’s ability to attract new customers and retain relatively new members, who may not be as loyal as long-time customers.

“I don’t think they’ve offered any different offerings or new services … to shoppers to justify the increase in fees,” he said. Shoppers who aren’t loyal or have recently joined may consider buying from rivals such as Sam’s Club, Gauri added.

Sam’s Club, a wholesaler like Costco, raised its membership fees in 2022. The company now charges $50 for a basic membership and $110 for a Plus membership, up from $45 and $100, respectively.

Customers could also switch to membership-free rivals like Target and Kroger, Gauri said. Those companies have “stepped up their game” in recent years, he added, while offering what he sees as stronger pickup and delivery options than Costco.

“If someone doesn’t need a membership, they probably won’t miss much,” he said.

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