Costco membership fees may rise soon and cost more this summer. Fees for the membership-only big-box stores typically increase every five years, and the five-year period approaches in June, as reported in Fox News.
Costco Membership Prices May Go Up
The report states that Costco’s Chief Financial Officer, Richard Galanti, hinted to investors that another fee hike could happen this summer.
For small businesses that use Costco for bulk purchases and to save money on a range of products, it’s important for them to know if and when the store’s membership will increase. In this way they can plan the increase in budgets and expenses and they will not be faced with ‘nasty surprises’.
During the latest earnings call, Galanti told investors: “On average, they [membership fees] were done about every five – a little more than every five and a half years, about five years and seven months. So five years after the June birthday of ’17, this would be June.”
35 million members affected by 2017 increase
The annual increase in Costco membership in 2017 impacted approximately 35 million members. According to the Fox News report, in 2017, half of the members affected by the membership surge were executives. The increase brought in an additional $5 on personal and business memberships in North America. It increased all Goldstar, Business and Business add-on members in the US and Canada to an annual fee of $60. While executive memberships increased by $10 to $120.
Costco Renewal Rates Climbing
Despite the challenges the retail industry faces, including inflation soaring to its 40-year high, renewal rates continue to climb for Costco. In the three-month period ended March 2022, renewal rates in the US and Canada were 92%, higher than in the previous quarter.
In light of escalating renewal rates, Galanti said the company “feels very good about our member loyalty, our success in moving members to executive, who are the most loyal.”
Small businesses that rely on Costco to purchase products for business use and resale should be aware of the potential annual membership increase in June this year. They must also consider the business benefits of Costco membership despite membership increases, which is why so many members choose to renew their membership.
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