Just days after informing employees that hourly wage workers would be getting a $1 salary bump, Costco has announced that it is increasing membership fees for the first time since 2017.
In an investor release, the warehouse chain announced that annual membership fees will increase by $5 for U.S. and Canada Gold Star, Business and Business add-on members to $65 per year, effective September 1.
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Executive members in the U.S. and Canada will see their annual dues increase from $120 to $130, with the maximum annual 2% Reward for these members also set to increase from $1,000 to $1,250.
Costco estimates that the price increases will affect 52 million memberships, more than half of which are at the Executive level.
The retail chain currently operates 609 locations in the U.S. and Puerto Rico and 108 in Canada, accounting for roughly 81% of Costco’s total warehouses globally.
The decision comes less than two months after Costco reported its fiscal Q3 2024 earnings and $1.123 million in membership fees, a 7.6% increase from the same period last year.
During that earnings call with investors on May 30, Costco CFO Gary Millerchip addressed questions surrounding membership fee increases and said they were “still evaluating” the timing.
“We’ve historically looked at increasing the membership fee every five years or so. And obviously, we’re beyond that time period now in terms of what would be the typical cycle,” Millerchip said. “It’s something that is still a case of when we increase the fee rather than if we increase the fee. But we’re still evaluating those considerations to determine what the right timing is and when we reach that point where we feel it is the right time, of course, we’ll be very open and direct and communicating that.”
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Costco estimated the company had 34.5 million Executive memberships by the end of Q3, which had increased by around 661,000 from the quarter prior. This made the Executive membership account for roughly 46% of paid memberships by the end of Q3.
Costco was up over 61.3% year over year as of Thursday morning.
