For the first time in seven years, Costco is raising its annual membership fee, increasing the previous charge by $5 to $10. The move will be Costco's first fee hike in seven years.
The Associated Press reported that the retail giant disclosed increasing its fees by around 8% in order for members to be able to enter its more than 700 warehouses across the U.S. and Canada.
The higher fees will be implemented starting Sept. 1, and will boost the prices of all kinds of memberships. The basic Gold Star membership, which used to be priced at $60, will now be $65 per year. The Executive membership, which used to be at $120 annually, will increase by $10, making the newest membership fee $130 per year.
The warehouse chain has not increased membership fees since 2017 despite the years of supply chain disruptions and high inflation rates, which have finally started to cool down recently.
According to The Washington Post, the move to increase fees will be affecting 52 million members, and that a little over half of that number have Executive memberships. Purchases by these members can earn rewards up to $1,000. The company noted that with the increase in membership fee, the rewards would also increase to $1,250.
Gary Millerchip, Costco's chief financial officer, told the company's investors that the hotdog-soda combo at Costco would still be sold at $1.50, carrying the same price for the product since the 1980s.
The popularity of Costco amid the high inflation, and with households squeezing budgets, has soared since many consumers were always on the lookout for stores that could give them more value for their money. The warehouse undeniably has become a popular shopping destination.
The influx of consumers to Costco has also gained favor in the eyes of investors, which in turn almost doubled the shares of the company for the past 18 months. With this, the market value of Costco increased during the mentioned period by about $180 billion.
When news about the membership fee was released, the shares of the company rose by more than 2%.
