Costco Hikes Annual Membership Fee for First Time Since 2017

(Bloomberg) — Costco Wholesale Corp. is boosting its basic membership fee for the first time since 2017, raising the charge to $65 a year from $60.

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The 8% price increase will take effect Sept. 1, Costco said in a statement Wednesday. The price of the retailer’s premium membership will rise to $130 from $120 now. The move will affect about 52 million memberships.

Costco shares rose 2.6% at 4:53 p.m. in extended trading in New York.

Investors and analysts have long waited for the Issaquah, Washington-based company to raise its membership price. Costco has typically increased fees every five years or so, prompting analysts in recent quarters to ask about the company’s thinking on the timing. Executives had said it was only a matter of time, and they wanted to be comfortable about the company’s renewal rates.

Membership income is especially important for Costco, which has used the proceeds to invest in its operations and keep the price of goods down. Higher membership fees will provide a profit tailwind for Costco, which tries to entice shoppers with low prices, albeit for bulk amounts, of a relatively narrow assortment of goods.

Costco is following Walmart Inc.-owned Sam’s Club in raising the price of membership as US consumers flock to warehouse stores, which offer wholesale quantities of goods to everyday shoppers. Sam’s Club boosted its annual fee to $50 for basic and $110 for premium in 2022, although it used its rewards program to return the extra cost to members during the first year.

(Updates share trading and adds context in fourth and fifth paragraphs.)

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