Costco Raises Annual Membership Fee for First Time Since 2017

(Bloomberg) — Costco Wholesale Corp. said it’s raising its basic membership fee for the first time since 2017, raising the fee to $65 a year from $60.

Most Read from Bloomberg

Costco said in a statement Wednesday that the 8% price increase will take effect Sept. 1. The company’s premium membership will rise to $130 from $120. The move will affect about 52 million memberships.

Costco shares were up 2.6% at 4:53 p.m. in extended trading in New York.

Investors and analysts have been waiting a long time for the Issaquah, Wash.-based company to raise membership prices. Costco typically increases fees every five years or so, prompting analysts in recent quarters to ask what the company thinks about the timing of the move. Executives have said it’s just a matter of time, and that they want to feel comfortable about the company’s membership renewal prices.

Membership income is particularly important to Costco, which has used the proceeds to invest in its operations and keep prices low. Higher membership fees will provide a tailwind for Costco, which is trying to lure shoppers with low prices, albeit in large quantities, on a relatively narrow range of goods.

Costco is following Walmart Inc.’s Sam’s Club in raising membership prices as U.S. consumers flock to warehouse stores that offer bulk items to everyday shoppers. Sam’s Club raised its annual fee to $50 for basic membership and $110 for premium in 2022, though it used its rewards program to return the extra cost to members for the first year.

(Update stock trading and add context in paragraphs 4 and 5.)

See also  PEPE Price Prediction for 7 Days – 3 Key Factors That Will Help Memecoin

Most Read from Bloomberg Businessweek

©2024 Bloomberg LP

Leave a Reply

Your email address will not be published. Required fields are marked *