Everything We Know About Costco's Potential Membership Fee Increases
There are many factors that separate Costco from your typical grocery store, but the retailer's membership fees are undoubtedly one of the biggest differences. Any consumer can stroll into grocery chains like Walmart and Whole Foods at their own discretion, but Costco requires you to present one of its coveted membership cards in order to enter warehouses and peruse its hallowed aisles of bulk goods.
Sure, there are a couple of neat tricks you can use to shop at Costco without shelling out for an annual membership, like getting grocery deliveries through Instacart or buying a Costco gift card that will allow you to spend a set amount of money during a store visit. But if you want to be able to shop at Costco without any major hurdles or limitations, you're going to have to pay up.
Costco currently charges $60 for its basic Gold Star membership and $120 for its higher Executive membership. However, analysts and Costco itself expect that to change some time in the future, since key executives at the company have indicated that fee increases are a not only a possibility, but a foregone conclusion.
While no concrete details in Costco's future membership fee plans have been confirmed yet, here's everything we know about those potential fee increases right now.
"A question of when, not if"
Just because Costco hasn't raised membership fees yet in 2023 doesn't mean it won't. In fact, Costco has been hinting since 2022 that another membership fee hike is in the cards.
In December last year, Costco CFO Richard Galanti told investors that fee increases are "a question of when, not if," adding that "I'll be purposefully coy on when that might be." The following month, CEO Craig Jelinek revealed during Costco's annual shareholder meeting that the company was still holding off on upping those membership dues.
"In our opinion, right now is not the right time to do it. That's not to say that at some point we won't, but at the moment we have no plans to take up the fee," he said.
Most recently in a May earnings call, Galanti revealed that the day where Costco's membership fees would once again go up still hadn't dawned.
"And at some point, we will [raise fees], but our view right now is that we've got enough levers out there to drive business, and we feel that it's incumbent upon us to be that beacon of light to our members in terms of holding [fees] for right now," he said.
So while membership fees are staying put for the time being, members should prepare themselves for that to change in the future.
A brief history of Costco's fee increases
Historically, Costco has raised its membership fees about every five years and seven months. The most recent of these increases took effect in June 2017, so Costco would technically be overdue for another fee increase if it wanted to stick by that pattern.
UBS analyst Michael Lasser predicted in March that Costco would announce its next fee boost in spring 2023 and then implement it in the summer, a forecast that evidently did not come to fruition. If Costco was planning to announce a fee hike while reporting quarterly earnings results, as it did in 2017, customers would still have a few months to wait before knowing for sure since the company's next quarterly earnings call is scheduled for late September.
When contacted for this story, Costco declined to offer any more insight on the potential timeline for membership fee hikes and how much fees may increase by. Galanti, on the other hand, promised during that May earnings call to keep the public informed: "We'll let you know as soon as we know."
Prior fee increases have followed a pattern
Though Costco is staying mum on how much fees will increase, members can make an educated guess by looking at the company's previous price hikes. When fees went up in 2017, the cost of the basic Gold Star membership went from $55 to $60 and the cost of the higher Executive membership went from $110 to $120.
The previous fee increase in 2011 was very similar, with the Gold Star membership increasing from $50 to $55 and the Executive Membership increasing from $100 to $110, according to the Los Angeles Times. If Costco follows the same pattern as those two most recent price increases, members can reasonably assume that the Gold Star membership will increase by $5 to $65 and the Executive Membership will increase by $10 to $130.
But while all the most important details of this highly-anticipated change remain unknown, Costco's roughly 125 million cardlholders should relish in the current state of their membership dues for the time being.
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