Costco’s Membership Fee Increases

Costco is increasing its membership fees for the first time since 2017. The annual fee for standard memberships will rise by $5 to $65, while the premium “Executive Membership” will increase by $10 to $130. This effect takes place in both the United States and Canada this year. Effective Sept. 1, 2024, the change will impact about 52 million memberships.

Although this isn’t great news for Costco members or those who plan on becoming Costco members, at least with the Executive Membership, the potential for rewards is also increasing from $1,000 to $1,250 annually. Membership fees are a significant profit source for Costco, as according to CNN, “Costco earned $4.6 billion in revenue from membership fees, an 8% increase from 2022.” Additionally, Costco reported a 7.4% increase in net sales for the five weeks ending July 7, 2024.

Costco isn’t the only retailer suffering from price increases.

Consumers have been feeling the effects of inflation across the grocery industry and are looking to the government. A survey by The Feedback Group found that consumers primarily blame government policies for high grocery prices, with a score of 3.86 out of 5, followed by food suppliers (3.75) and grocers (3.40). As inflation and escalating food prices become significant election issues, with 67% of respondents in a Yahoo Finance-Ipsos survey citing food costs as their top inflation concern, recent CPI data shows a 3.5% annual inflation increase and a 1.2% rise in grocery prices for March.

Factors contributing to these price hikes include supply chain disruptions, labor shortages, and ecological challenges. President Biden has criticized grocery chains for overcharging and urged them to reduce prices, emphasizing that tackling inflation is his top economic priority.

Fortunately, Costco has constantly reiterated that its famous $150 hot dog combo will not increase in price.