Costco to raise membership costs

This is the first time in seven years that Costco is increasing its membership fees.

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.

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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.
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