Costco's Membership Fee Increase Goes Into Effect
Costco Wholesale's membership increase took effect on Sunday as its annual membership fees increased to $65 from $60 for its Gold Star plan and to $130 from $120 for its Executive plan. While Wall Street analysts have long pushed for Costco to increase membership fees, the latest increase marks the first time the company has upped the price in seven years. Each plan’s increase represents a roughly 8 percent increase from the current price. The price increase impacted 52 million members in the U.S. and Canada, the company said.
Total Retail's Take: It will be interesting to see the impact that this price increase has on Costco's loyal customer base. My inclination is that it will do little to stop members from re-upping their memberships and continuing to shop with the warehouse club retailer. Costco has succeeded in engendering a loyal customer base, driven by its wide breadth of merchandise, affordable pricing, and convenient in-store shopping experiences. This loyalty is evident in renewal rates for Costco memberships, which the company reported last quarter were 90 percent worldwide and 93 percent in the U.S. and Canada. Despite having to paying more, Costco's members are still likely to find value in membership.
