Costco Gives Membership Fee Update as Price Hike Looms
Costco has been dangling the probability of a membership fee increase over its hordes of shoppers for around a year and a half now. As outgoing Costco CFO Richard Galanti has repeatedly expressed regarding the fee hike: "It's a question of when, not if." However, the retailer just confirmed that it still has no plans to roll out that much-anticipated fee increase for the time being.
Following the release of its latest earnings results, Costco hosted a call with investors to discuss the data on March 7. When the topic of membership fees came up, Galanti revealed that the company still isn't in a rush to implement a price increase.
"We like the fact that we're performing well. We like the fact that…most all metrics are going in the right direction in our business right now," he said. "We've got plenty of runway left."
Galanti added that he's "sure" the company will raise its membership fees "at some point." But since he plans to step down from the CFO role on March 15 after nearly 40 years in the position, any fee hikes won't be under his watch.
This means that Costco members will remain in the dark for now regarding the timing of the planned fee increase. The retailer currently charges $60 annually for its basic Gold Star Membership and $120 annually for its higher-tier Executive Membership, which comes with extra perks. The last time that Costco raised its membership fees was in June 2017, when the Gold Star Membership went from $55 to $60 and the Executive Membership went from $110 to $120.
The company has historically implemented a fee hike about every five years and seven months. If Costco had continued to follow that pattern, members would have seen their fees increase in January 2023.
Galanti acknowledged during a December 2023 earnings call that Costco has waited longer than usual to increase its fees. But the plus side of the delay, Galanti said, is that shoppers are getting extra value out of their memberships in the meantime.
However, with Galanti set to step down in a few days and former CEO Craig Jelinek leaving his own post at the start of this year, Costco's leadership is currently in the midst of a major shakeup. It remains to be seen if new CEO Ron Vachris and new CFO Gary Millerchip will be more willing to implement a fee increase than their predecessors.
In other Costco news, the company announced that it plans to expand the freshly made Kirkland Signature sushi that debuted at its Issaquah, Wash., warehouse last year. Galanti said the offering will arrive at two more locations "in the very near future."
He also revealed that Costco finally plans to roll out the inventory lookup feature it has been promising since last year in about a few months. The feature—which Costco shoppers have been requesting for years—will allow members to check online whether certain items are in stock at warehouses in their area.
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