Costco announces first membership fee hike in seven years for U.S. and Canada
Costco will increase its annual membership fees in the United States and Canada for the first time in seven years, starting September 1. The price of Gold Star (individual), Business, and Business add-on memberships will rise by $5, while Executive Membership fees will see a $10 hike, according to a press release issued on Wednesday, July 10.
New membership costs
With these changes, the cost of Gold Star and Business memberships will go from $60 to $65, and Executive Memberships will increase from $120 to $130. The fee increases will affect approximately 52 million memberships, with a little over half being Executive memberships, the release noted.
Executive Membership rewards
In addition to the fee hike, Costco announced an increase in the maximum annual 2% Reward associated with Executive Memberships, raising the cap from $1,000 to $1,250.
Store distribution and previous fee hike
Costco operates 882 warehouses globally, with 609 in the U.S. and Puerto Rico and 108 in Canada. About 80% of its warehouses are located in these two countries. The last membership fee increase was in June 2017.
Inflation and competitor comparison
Costco typically raises its membership fees every five and a half years but delayed this increase to seven years due to high inflation. Rival retailer Sam’s Club, owned by Walmart, last increased its membership fee in 2022 after keeping it unchanged for nine years.
Executive statements
Costco Executive Vice President and Chief Financial Officer Gary Millerchip hinted at the fee increase during the company’s quarterly earnings call on May 30. He stated, “It is still a case of when we increase the fee rather than if we increase the fee. But we are still evaluating those considerations to determine what the right timing is.” Millerchip also highlighted that the company’s membership renewal rates have been strong, supporting the timing of this fee adjustment.
