For the first time since June 2017, Costco is discussing an increase in the cost of its membership.
The company, on an earnings call, acknowledged that it historically has raised fees every five to six years, a point that is quickly approaching. Robert Nelson, Costco’s senior vice president of treasury, said “there would be more discussions” as the timeline approaches, but he doesn’t expect prices to go up immediately.
“Given the current macro environment, the historically high inflation, and the burden it’s having on our members and all consumers in general, we think increasing our membership fee today ahead of our typical timing is not the right time,” he said.
However, some analysts, like UBS’s Michael Lasser, say that when it comes to a membership price increase, “it’s not a question of if, but a question of when.”
The last increase saw membership fees jump from $55 to $60 for Gold Star customers and executive membership fees jump by $10.
Membership fees are a vital source of income for Costco, directly impacting the company’s bottom line. At the end of the third quarter, it boasted 116.6 million cardholders and a worldwide renewal rate of 90%.
While the question of membership fees is far from resolved, Costco did make it clear that it won’t be rising prices on another staple. The quarter-pound hot dog and 20-ounce soda combination in stores will remain at $1.50, the same price Costco has charged since the mid-’80s, despite inflation.
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