This article has been updated since its initial publish date.
If you’re a Costco shopper, don’t expect your annual $60 membership fee to remain the same forever. Here’s what we know about the eventual membership fee price raise that Costco’s chief financial officer Richard Galanti discussed in the company’s most recent quarterly earnings call:
READ MORE: Is It Possible To Shop At Costco Without A Membership? Try This Hack
Costco isn’t raising its membership fee now, but company officials are signaling a change could happen soon. The question is, how soon?https://t.co/Sgb8tQvAOv
— KTLA (@KTLA) March 5, 2023
Costco CFO Confirms Membership Price Will Indeed Increase
“June would be our sixth anniversary. But, and as I mentioned in the previous calls, looking at the last, I think they averaged around five years and seven months, which is about now or last month,” the CFO shared.
Galanti then confirmed that a change regarding the membership price would be coming. “And what we said over the last few semesters — over the last few quarters, it was — I’m a college kid. For the last few quarters is that it’s a question — in our view, it’s a question of when, not if,” he added. The CFO, however, as The Street points out, still would not confirm a timetable for the change. “And so we’ll let you know,” he said.
Costco answers whether it is raising membership fee: ‘Question of when, not if’https://t.co/CEtGYrTq8o
— FOX Business (@FoxBusiness) March 4, 2023
Why The Company Is Raising Prices
Galanti stressed that the money brought in by raising fees would be “used in a way that members should be happy about,” as The Street notes. “But keep in mind, that’s one way that we become even more competitive. We take those monies and directly become more— even more competitive,” he added.
Essentially, Costco takes the extra money it earns in membership fees and uses it to hold— or even lower— the price of certain items. Galanti also told listeners how Costco determines its pricing
“I might add though, when we do — our locations do weekly comp shops of 100 to 150 key items, all directly competitive items and then a variety of other our direct competitors and other limited comp shops against other forms of traditional retail where the gap of competitiveness is much greater,” he shared. “But at the end of the day, our relative level of competitiveness in our view is as strong as it’s ever been.”
More good inflation news:
Costco says it will not raise its annual membership price for the foreseeable future because ‘now is not the right time.’
Just the opposite: Customers need Costco’s affordability.
Membership renewal rate at all-time-high: 92%https://t.co/4GCvI3nFFU
— (((Charles Fishman))) (@cfishman) May 27, 2022
Costco’s Membership Price Raise: ‘A Question Of When, Not If’
As noted during the Seattle-based wholesaler‘s earnings report in December 2022, Galanti revealed that while there’s apparently “no rush” to raise prices, customers should know that an eventual hike is “a question of when, not if.”
Costco’s last price hike, as CNBC points out, was in June of 2017 . Shoppers witnessed Costco raise the price of its ‘Standard Gold Star’ membership from $55 to $60. It also increased the price of its ‘Executive membership’ from $110 to $120.
Since this news was revealed, some Costco shoppers took to Twitter to share their thoughts (and disappointment at the future price raise). One customer looped in the Costco news with other things they deemed bad when it comes to the future, “Taco Bell says Gen Z wants to eat chicken and not beef. Costco to raise price of membership for its new and current members next year. Tramp stamps are back in fashion, YUCK!” Another added, “please don’t raise the membership price at Costco!”
Galanti said to analysts, CNBC reports, that on average, Costco has increased its rates every 5 years and 7 months. This, the outlet noted, would put the retailer on track for another increase in January of 2023. Still, as Galanti said when on the call, no decisions have been made as to when the expected fee increase will be officially implemented.
"It's a question of when, not if," Galanti said. He went on, "There's no analytical framework we use other than we feel very good about our member loyalty and our strength. And if we wanted to do it yesterday, we could. If we want to do it six months from now, we can. So, we'll wait and see."
What Does A Costco Membership Provide?
Just like its competitors BJ's and Sam's Club, Costco only allows those with memberships to shop in its warehouses, and the wholesaler boasts a 92.5% renewal rate in both the U.S. and Canada.
If you're interested in the current $60 standard Gold Star membership, this option grants customers access to all Costco locations around the world. This also comes with an extra card for an additional family member or someone who lives in your household. The Executive Membership, however, is another tempting option, as it provides members with 2% rewards on Costco purchases, and even more benefits on certain products.
