Costco raises membership fee for the first time in four years

Are you a Costco member? If so, get ready to pay a little more for your membership. The popular warehouse club recently announced an increase in its membership fees, with the changes set to take effect on September 1st. Annual memberships will now cost $65, up from $60, while the Executive Membership fee will be raised to $130 from $120.

This move affects approximately 52 million memberships, with over half of them being executive memberships. Despite the price hike, Costco’s shares rose about 2% in extended trading following the announcement.

This is Costco’s first membership rate increase since June 2017, making it a relatively rare occurrence for the company. Typically, Costco raises its fees every five and a half years, but it had been holding off due to consumer concerns about high inflation. CEO Craig Jelinek and CFO Richard Galanti had both previously stated that the timing was not right for a fee increase.

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One interesting point to note is that Costco relies heavily on membership fees to drive revenue and keep merchandise prices low. This is a similar strategy to its rival, Walmart-owned Sam’s Club, which also increased its membership fees in 2022 after nine years. Despite the increase, Sam’s Club memberships are still cheaper than Costco’s, with annual fees of $50 for club members and $110 for the higher-tier “Plus” level.

In response to potential misuse of memberships, Costco has implemented stricter enforcement measures, including additional checks at self-checkout aisles. This is a similar approach to Netflix, which has cracked down on users sharing accounts.

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