Costco is increasing its membership fees for the first time in seven years, with the basic annual fee going up by $5 to $65 in the US and Canada.
The premium Executive Membership fee will also increase by $10 to $130 annually, offering members the opportunity to earn up to $1,250 in rewards annually, up from $1,000 previously.
The big picture: The fee hikes will impact around 52 million memberships, with over half being Executive members, according to Costco.
- Membership fees contribute significantly to Costco’s revenue, with the company earning $4.6 billion from fees last year, helping offset costs and maintain competitive pricing.
- Costco is implementing fee increases to deter unauthorized use of memberships and maintain profitability, similar to strategies used by streaming companies.
- The fee adjustments go into effect on September 1, coming after competitors like Sam’s Club and Amazon raised their membership fees in recent years.
- Costco reported a 7.4% increase in net sales for the five weeks ending in July compared to the previous year, leading to a more than 2% rise in Costco’s shares during after-hours trading.
