Costco to Raise Annual Membership Fees Starting September... First Increase Since 2017

Costco, the American warehouse discount retailer, is set to raise its membership annual fees for the first time since 2017.

Costco announced that starting September 1, it will increase the annual membership fee from $60 to $65 in the United States and Canada, an approximately 8% hike. The premium membership (Executive Membership) fee will rise from $120 to $130. This is the first time Costco has raised its membership fees since June 2017.

As a result, about 52 million members in the North American region will be affected by this increase. Among them, half are confirmed to hold premium memberships.

The market views this move as already anticipated. Costco has typically raised membership fees every 5 to 6 years. From the company's perspective, the timing of the increase had been delayed due to the pandemic and high inflation. In 2022, when a fee increase was expected after five years, Craig Jelinek, Costco's CEO, stated in a CNBC interview that due to inflation concerns, "We are not considering it at this time. It is not the right time to raise membership fees."

This measure is expected to improve Costco's performance. On the day the New York Stock Exchange closed slightly lower, Costco's stock price is currently showing a rise of about 2.5% in after-hours trading.

Michael Ashley Schulman, Chief Investment Officer (CIO) of RunningPoint Capital Advisors, said, "The market has anticipated a membership fee increase for several years," adding, "It will bring solid growth to sales and stock prices and provide relief to those who have been waiting for this increase." Membership fee revenue accounted for 1.9% of Costco's total revenue in the 2023 fiscal year.

Locally, there are also expectations that other major retailers, such as Amazon Prime linked with Whole Foods, may follow with membership fee increases. Earlier, Sam's Club, a warehouse discount store under Walmart, raised its membership fees in 2022.