There’s a reason so many people love shopping at Costco despite having to pay a membership fee to be able to walk through the door. Costco is known for its competitive prices across a wide range of grocery and household products. Plus, Costco’s rotational products also tend to be heavily discounted, so all told, there’s a lot of savings to be reaped even when you factor in those annual membership fees.
But soon, the cost of a Costco membership could climb. And that’s something for current and prospective members to keep on their radar.
Don’t get too settled on today’s prices
The cost of a basic Costco membership is $60 a year. An executive membership costs $120 a year, but in exchange, you get 2% cash back on all Costco purchases, the same way you may be used to getting cash back from a credit card. And so if you spend enough money at Costco on a yearly basis, an executive membership can easily pay for itself.
Meanwhile, Costco’s CFO Richard Galanti recently said that Costco fees are apt to increase — it’s just a matter of when. And while Galanti didn’t point to a date at which that’s set to happen, the warehouse club giant’s last three fee hikes were spaced five years and seven months apart. Since prices last went up in June of 2017, that would indicate that Costco is due for a fee hike as early as January of 2023. Ouch.
Part of a growing trend
If Costco raises its membership fees, it won’t be the first service to do so in recent months. Not so long ago, Sam’s Club raised the cost of its memberships. And Amazon, which is more of an indirect Costco competitor, increased the cost of a Prime membership earlier in the year.
A Costco fee hike therefore doesn’t seem unreasonable. But it may also not sit so well with members, many of whom are no doubt being squeezed by inflation.
Should a Costco fee hike make you rethink your membership?
Not necessarily. First of all, Costco offers so much value that for many people, it will still be worth paying for, even at a higher cost. But also, there’s a good chance any fee hikes that come down the pike will be modest.
For example, Costco might raise the cost of a basic membership to $65 and the cost of an executive membership to $130. But in that case, we’re talking about an extra $5 to $10 in the course of a year for Costco access. If you use your membership often, keeping it is probably an easy decision.
Now, if you’ve been using your Costco membership less and less in recent years, then a fee hike may be the thing that causes you to reconsider a renewal. But all told, current Costco members shouldn’t stress about higher costs. It’s the fees Costco charges for membership that allow it to maintain its ultra low prices. And that’s actually something to be grateful for.
