Costco Just Gave a Shocking Update on Its Membership Prices
For over a year, we’ve been hearing through the grapevine that Costco has been considering a membership fee increase. Most recently, following an earnings call that took place last September, the retail giant had even gone as far as to repeat themselves again, saying, “It’s a question of when, not if.” This happens to be the same exact response CFO Richard Galanti gives every time he is asked whether the company plans to hike up their membership fees.
The last time membership holders saw an increase to their annual fee was back in June of 2017. And if the brand were to stick to its track record of considering a price change every five-and-a-half years, it seems as if a change has certainly been looming. In 2017, the cost increase directly affected both the company's lower-tier Gold Star Membership, as well as the Executive Membership. And although the price of each membership was only raised by $5, even seeing a that small increase happen twice within the span of 10 years would come as a shock.
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But despite steadily teasing the idea of membership fee increases, after sharing the company’s latest quarterly earnings call on December 14, Galanti admitted that the reason Costco has waited longer than usual to implement a fee increase, was due to the fact that they “haven’t needed to do it” just yet.
As it seems, Costco has had quite the year in 2023 — especially this quarter. Not only did the company come out ahead on both quarterly sales and profits, it also saw an increase of 2.6-percent in its same-store sales in the United States as well. On top of that, Gilanti noted that membership renewals were up along with new member signups. So as it seems, Costco memberships have been flourishing.
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In the last quarter alone, Costco reported 72 million paid household members, which is a staggering number that boasts a 7.6-percent increase over last year's findings. Membership fee revenue also increased for the company, upping 8.2-percent from last year to a mind-numbing $1.082 billion. With numbers like Costco’s current earnings, it’s no wonder why Galanti was quoted as saying, "At this juncture, we feel pretty good about what we're doing.”
But as Galanti has warned before, shoppers “shouldn’t count on it” when questioning if their membership fees will stay the same as they’ve been. For now, the CFO says that the company likes “providing extreme value,” specifying that while they’ve waited a little longer than average to implement an increase, they feel that the brand has certainly “driven more value to the membership.” Only time will tell how long Costco will drag their feet on the issue.
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