If you’re a frequent Costco shopper and member, we’re happy to relay the following news— the wholesale giant will be *putting off* a potential membership fee increase. This, Fox News reports, is due to the company’s renewal rates hitting “all-time highs in its fourth quarter.” During Costco’s earnings call last week, the company (which usually increases its membership fee ever 5 years), revealed that customers will not have to prepare for a higher fee in the near future.
“In terms of membership fees and a possible increase, there are no specific plans regarding a fee increase at this time,” Costco Chief Financial Officer Richard Galanti said during the call. “We’re pleased with our growth in both top line sales and membership households over the last several quarters and in member loyalty as reflected in increasing member renewal rates.”
Costco is due for a membership price increase in 2022, but it won’t happen right away. https://t.co/O9rIwkDv9b
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At the end of the fourth quarter, Costco’s membership renewal rate came in at “92.6% in the U.S. and Canada, and 90.4% worldwide, up from 92.3% and 90% in the previous quarter, respectively,” Fox News writes, and Costco has 65.8 million “paid household members and 118.9 million cardholders as of the end of the fourth quarter,” both up 6.5% compared to a year ago. Paid executive memberships totaled “29.1 million, an increase of 1.2 million compared to the third quarter.” In addition, executive members now “represent over 44% of Costco’s members and just under 72% of its worldwide sales.”
As many customers know, Costco has historically increased its membership fees about every 5.5 years. Galanti noted in the call that the last 3 increases were— on average— 5 years and 7 months apart. Costco, which last raised its membership fees in June 2017, currently charges $120 every year for executive memberships and $60 per year for its Gold Star and business memberships.
"If you look at June of '17, plus five years and seven months, you're talking roughly January '23," Galanti explained. "Now I'm not suggesting it's January '23. I'm just saying it's not there yet, anyway. And our view is we are confident in our ability to do so. And at some point, we will, but it's a question of when, not if." He added, "Given the headline of inflation and concerns about recession, we feel quite comfortable driving sales and earnings the way we are right now, and we still have that arrow in our quiver as we go forward."
