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Costco is hiking its annual membership fees for US and Canadian customers – but despite the increases, company executives are resolute that the famously bargain-priced hot dog will not change.
The membership increase, set for September 1, 2024, will impact around 52 million memberships, a little over half of which are on the “Executive” plan.
The annual US and Canada “Gold Star” memberships, Business and Business add-on members will see fees increase by $5. The annual fee for a “Gold Star” member currently sits at $60 plus sales tax, Costco said in an announcement this week.
Higher-tier “Executive” members in the US and Canada will see annual fees increase from $120 to $130. The maximum annual 2 percent reward, associated with the Executive tier, will increase from $1,000 to $1,250.
This is the first membership price hike Costco has announced in seven years.
Both Executive and Gold Star memberships allow you to shop at all Costco warehouses and online, and include two membership cards for you and someone in your household.
Executives currently get a 2 percent reward per year of up to $1,000 on eligible Cost and Costco Travel purchases, which will be increased this September. Executives also get Costco service discounts and additional benefits.
While members will now have to fork out an extra $5 or $10 a year to keep their membership, some analysts believe that a price hike for the wholesaler was overdue.
The company has, on average, raised rates roughly every five and a half years, which would have meant Costco was tracking to raise their fees in late 2022 or early 2023, CNBC reports.
In 2022, Costco’s then-CEO Craig Jelinek told CNBC that a membership hike was “not on the table right at the moment” due to inflation concerns.
Despite the expected annual fee increase, Costco bosses have reassured customers that the unbelievably low $1.50 hot dog deal will remain.
“To clear up some recent media speculation, I also want to confirm the $1.50 hot dog price is safe,” Costco’s new chief financial officer, Gary Millerchip, said in May.
The price of the quarter-pound hot dog with a 20oz soda has remained the same price since 1985 at the warehouse retailer. It has remained a favorite among shoppers for decades and has a cult following.
Costco’s former CEO Jim Sinegal jokingly warned his successor, Craig Jelinek, to keep the hot dog at the $1.50 price, no matter what.
"I came to [Sinegal] once, and I said, ‘Jim, we can’t sell this hot dog for a buck fifty. We are losing our rear ends.’ And he said, ‘If you raise the ef**** hot dog, I will kill you. Figure it out,” Jelinek recalled in a 2018 presentation, 425 Business reported.
Last year, Costco sold more than 130 million hot dog-soda combos globally, according to CNN, worth $195m.
