Costco Looks To Raise Membership Prices
Costco’s membership prices are currently at all-time highs, but the company is still looking to raise them. With that in mind, the big question remains: when exactly will Costco implement the cost increase?
Richard Galanti, the company’s CFO told investors on a Q2 earnings call on Thursday that, in their view, “it’s a question of when, not if”. This coming June would mark the sixth anniversary since Costco last raised the price of its Gold Star membership, which currently goes for $60.
Such a timeline is consistent with the company’s past membership price hikes, which typically occur every five years and seven months. For example, the last time Costco increased its membership prices was in June 2017, in the pre-pandemic era.
“Membership growth has remained strong. We ended the second quarter with 68.1 million paid household members and 123.0 million cardholders, both up more than 7% versus a year earlier,” Galanti added.
Perhaps even more impressive than this is the company’s membership renewal rate, which came in at 92.6% in North America and 90.5% worldwide.
Costco also managed to hit $1.027 billion in membership fee income this year compared to $967 million in the year prior, representing an impressive $60 million increase or 6.2%. Such numbers indicate that the wholesale market is doing just fine in these economic times.
Although membership prices will inevitably increase, Galanti assures that the prices of their goods will remain low despite inflation.
“We continue to see improvements in many items. Commodity prices are starting to fall. Not to back to pre-COVID levels…but continue to provide some relief. Things like chicken, bacon, butter, steel, resin, nuts,” he explained to investors.
At the end of Q2, Costco reported a net sales increase of 6.5% from $50.94 billion in 2022 to $54.24 billion this year.
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