Customers leave a Costco store on June 28, 2023 in Teterboro, New Jersey.
Kenabtankur | Corbis News | Getty Images
You’ll soon have to pay more if you want to shop at costco.
The members-only warehouse club said Wednesday that membership fees will increase by $5 starting Sept. 1 in the U.S. and Canada. Its higher-level plan, called Executive Membership, will increase from $120 to $130 per year.
Costco said the fee increase will affect about 52 million members, slightly more than half of whom are premium members.
The stock rose about 2% in after-hours trading Wednesday.
For Costco, this marks the first increase in membership rates since June 2017. fee.
However, Costco is holding off on increasing prices until then. In an interview with CNBC, Chief Executive Craig Jelinek denied this and said now is not the best time for consumers to deal with high inflation. Chief Financial Officer Richard Galanti made similar comments on a previous earnings call.
Costco relies on membership fees to drive much of its revenue and help keep merchandise prices low. its competitors, Walmart-Sam’s Club, a unit of Sam’s Club, is raising membership fees in 2022 for the first time in nine years. Even after the fee increase, however, Sam’s Club memberships are still cheaper — $50 per year for Club members and $110 per year for higher-level “Plus” memberships. At BJ’s Wholesale, annual membership fees for club membership and higher levels are $55 and $110, respectively.
Costco said it stepped up enforcement last year to ensure shoppers don’t use other loyalty cards. It adds additional checks for membership at self-checkout lanes. The moves are reminiscent of Netflix, which has also cracked down on people who don’t pay to use its service.
This story is developing. Please check back for updates.
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