In a monthly sales call, a Costco spokesperson said the wholesaler would raise membership fees for the first time since 2017.
The price increases will go into effect on September 1, 2024.
All membership levels will be affected. The Gold Star and Business memberships will be raised from $60 to $65 annually.
The Executive membership cost will be raised by $10, from its current $120 per year price to $130. These increases will affect customers in both the U.S. and Canada.
Executive Membership perks are being extended alongside the cost increase. The maximum for the Executive Membership 2% reward will increase from its current $1000 per year to $1250 per year. This reward benefit increase will more than offset the membership price raise for those who regularly shop there for supplies and goods.
Costco currently has over 50 million members, more than half of which are Executive level. The fee increase is estimated to bring the vendor nearly $400 million in additional revenue per year. Costco reported $4.5 billion in membership revenue in 2023.
Costco’s New CFO
The news comes just 4 months after Costco’s new Chief Financial Officer, Gary Millership, took over for Richard Galanti. Galanti was one of the longest serving CFO’s at a single company in U.S. history. Galanti is known for defending Costco’s $1.50 hot-dog-and-soda combo, a bargain Gary Millership pledged to maintain in his debut earning call with investors.
While it may appear that Costco is following the trend of other membership-based companies, that’s not the case. Costco has historically raised membership prices once every 6 to 7 years. The last two rate raises were in 2017 and 2011.
Membership revenue has come into focus for both Costco leadership and investors. The company has been testing several measures as part of a larger crackdown on membership sharing with non-members.
Earlier this year, the wholesaler piloted membership scanners that display the member’s photo to ensure the person entering is the registered Costco member. As a second safeguard, customers are now asked to show a photo ID at checkout.
The measures were introduced to prevent non-members using member cards, a practice that Galanti said increased in the wake of the pandemic in 2020.
