Costco Raising Membership Fees
After months of discussion on the subject, Costco Wholesale Corp. has finally moved to raise its membership fees. Annual membership fees will increase by $5 for U.S. and Canada Gold Star (individual), Business and Business add-on members, while annual fees for Executive Memberships will increase from $120 to $130.
In addition, the maximum annual 2% reward associated with the Executive Membership is increasing from $1,000 to $1,250.
The membership fee change will go into effect on September 1 and is expected to impact more than 52 million memberships. The last time Costco raised its membership fees in the United States and Canada was in June of 2017.
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The decision was shared as the wholesaler released its June financial report, which reflected net sales of $24.48 billion for the five weeks ended July 7, a year-over-year jump of 7.4%. Net sales for the first 44 weeks, meanwhile, were $210.55 billion, an increase of 6.9% from $196.93 billion last year.
Cash-strapped consumers continue to flock to Costco clubs for all of their household needs, as evidenced in the company’s third-quarter financial results, which were released in late May. For the period ended May 12, the company reported net income of $1.68 billion, or $3.78 per diluted share, up from $1.3 billion and $2.93 per diluted share last year.
Net sales for Q3 were $57.39 billion, a 9.1% jump from $52.6 billion in the third quarter of last year. Costco also reported that its Q3 membership fee income was $1.123 billion, an increase of $79 million, or 7.6% year over year. In terms of renewal rates, the U.S. and Canada renewal rate was 93%, up one-tenth of a percent from Q2 end.
Issaquah, Wash.-based Costco currently operates more than 880 warehouses, including 600-plus in the United States and Puerto Rico and 108 in Canada. The company is No. 3 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America. PG also named Costco among its Retailers of the Century.
