It will soon cost more to be a part of the club.
On Wednesday, Costco Wholesale announced plans to increase annual membership fees by $5 to $10 in the U.S. and Canada, effective Sept. 1. It is the first time in seven years the retail giant has done so.
The annual fee, last raised in June 2017, would increase by $5 to $65 for "gold star" and business members and to $130 from the earlier $120 for executive members, the company said.
"The fee increases will impact around 52 million memberships, a little over half of which are Executive," Costco's press release stated.
COSTCO FLUSHABLE WIPES SETTLEMENT HAS WHOLESALE GIANT AGREE TO $2M PAYOUT
Costco's website says the company is "loved by over 133 million members." Some perks they get to enjoy include testing of free samples, discounts on food, gas, home insurance, travel and grocery items and an annual 2% reward on qualified purchases at its 882 warehouses worldwide.
"Despite inflation, Costco has kept prices low," Felipe Caro, a professor at the UCLA Anderson School of Management told the Washington Post. "But the membership fee eventually had to go up, and it makes sense to do it now when customers really notice its value. 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 $24.48 billion in net sales in the June 2024 retail month, which ended on July 7. This was up 7.4% from 2023.
COSTCO RIVAL CHANGES KEY PERK POLICY, BUT IT COULD BACKFIRE
Revenues from membership fees were up 7.6% in the third quarter of fiscal 2023. Membership fees made up 1.9% of the company's total revenue for the fiscal year.
COSTCO-LOVING MAN CAUGHT OFF GUARD BY LOVED ONES IN STORE FOR HIS SURPRISE BIRTHDAY PARTY
CLICK HERE TO READ MORE ON FOX BUSINESS
Costco rival Sam's Club raised its annual membership fees in 2022. The Walmart-owned retailer is behind Costco in sales, and recently announced that shipping would only be free for its Plus members if they reached a minimum threshold of $50 per order.
Reuters contributed to this report.
