For well over a year, there has been speculation that Costco might hike its annual membership fee. And although such a move is probably not imminent, it might be on the horizon.
During Costco’s latest quarterly earnings call, Richard Galanti, chief financial officer, suggested that a membership hike is inevitable.
Galanti noted that over the last 16 or so years, Costco has increased its membership cost roughly every five years and seven months. He said that if the retailer continued to follow that time frame, the next hike would be in January 2023. Then, he added:
“I know on the last call, I said, that doesn’t mean it’s going to be January ’23. It will be — it’s a question of when, not if. But at this juncture, we’ll just have to wait and see. And I’m not trying to be cute about it, but there’s not a whole lot more I can tell you.”
Galanti said that he was “fine” with Costco waiting “a few months or several months” before increasing the fee.
While Galanti admitted to being “purposely coy” about when such a change might occur, his very choice of words seems to indicate that there is a strong possibility the fee could increase in 2023.
The current membership structure is an annual fee of $120 for the Gold Star Executive level, or $60 for the Gold Star level.
Costco last raised fees in June 2017, when it hiked membership costs $10 for the Gold Star Executive package. The last increase on the Gold Star Everyday membership was $5.
Recently, Costco rival Sam’s Club raised its membership fee. It was the first such increase in almost 10 years.
Galanti stressed that when it comes to hiking the membership fee at Costco, the retailer has “no problem thinking about doing it and doing it ultimately.” He added:
“There’s no analytical framework we use other than we feel very good about our member loyalty and our strength. And if we wanted to do it yesterday, we could. If we want to do it six months from now, we can. So, we’ll wait and see.”
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Chris Kissell
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