Costco membership fees will increase, CFO says, but when?
(NEXSTAR) – Costco isn’t raising its membership fee now, but company officials are signaling a change could happen soon. The question is, how soon?
During a call with investors last week, Chief Financial Officer Richard Galanti reiterated that a price hike for its Gold Star membership will happen, but said “it’s a question of when, not if.”
Costco last raised its base membership fee in June 2017. Historically, the retailer has raised the Gold Star annual price every five years, with the previous three happening five years and seven months apart.
Had the newest price hike followed the same pattern, Gold Star members would have already seen the price increase, Galanti acknowledged.
He has been hinting since early last year that a membership price hike would happen “at some point.” In December, Galanti said there was “no rush” to raise the membership fee amid inflation and fears of a recession.
“If we have to wait a few months or several months, that’s fine,” he said at the time. CEO Craig Jelinek made a similar statement during a meeting in January, according to Insider, calling now “not the time to do it.”
Costco’s membership remains high, earnings data released Thursday shows. More than 1 million new members joined in the previous quarter, and membership renewal remains over 90% in the U.S. and Canada.
According to Galanti, Executive Memberships make up 45% of the company’s current shoppers. These members comprise roughly 73% of sales. Currently, a Costco Gold Star Membership is $60 and an Executive Membership is $120.
Last year, competitor Sam’s Club raised its membership fee. For now, it’s unclear when Costco will raise its membership fee. When asked, Galanti said, “we’ll let you know.”