Maintaining or buying a membership for Costco will soon become more costly, as the bulk retailer announced Wednesday its membership fees will increase at the start of September, in its first price hike since 2017.
Costco’s Gold Star Membership and Business Membership will jump from $60 to $65 per year in less than two months, while the Executive Membership fees will increase from $120 to $130 per year.
The cap for the annual 2% reward for certain purchases held by Executive Membership shoppers will increase from $1,000 to $1,250 as part of the price hike.
Costco shares climbed more than 2% in after-hours trading after closing down a fraction of a percent at $884.31.
Company executives had long viewed the price hike as inevitable, according to Bloomberg, which noted increased membership fees will serve as a profit boon for Costco.
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52 million. That is about how many Costco members, a little over half of whom have the Business Membership, will be impacted by the price increase.
Membership fees represent the largest share of Costco’s profits. The retailer reported $1.1 billion in membership fee revenue in its latest quarter and $4.5 billion in 2023. Costco has kept a close eye on the revenue source, cracking down on people sharing membership cards by requesting photo ID validation at cash registers for membership cards without pictures. Costco competitor Sam’s Club also makes the bulk of its profits from memberships and raised its own fees in 2022, making identical $5 and $10 increases to its basic plan ($50) and premium plan ($110).
Up 8% This Year, Why Is Costco Stock Outperforming? (Forbes)
Costco hikes membership fee for the first time since 2017 (NBC News)
