Loyal shoppers flock to Costco for many reasons, but the ability to save big bucks on purchases is likely to top most customers’ lists. The warehouse retailer makes it easy to get a great deal on everything from daily necessities to electronics and baked goods to batteries. But if you’re a devoted Costco fan, you should prepare for a major price change coming in June that could affect all shoppers. Read on to see what the beloved wholesaler is making more expensive.
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Costco may be unique from other discount retailers for offering items in bulk, but its most notable difference is the membership required to access these offers. And as half a decade has passed since the store made the last change to its annual membership price, executives hint that the cost of an admission pass will likely increase as part of the timing of company’s past price increase.
“On average, they were done about every five years, just over five and a half years, about five years and seven months,” Richard Galanti, Costco’s chief financial officer, said during a March 3 earnings call, The Street reports. “And five years after the June 2017 anniversary, that would be this June. So I think the question will continue to be asked until we do or don’t do something.”
Currently, Costco customers have the option of purchasing two types of membership. Gold Star members pay $60 per year for store access for two members per household, including the ability to purchase items from the Costco website. Executive members pay a higher annual rate of $120, but they also earn 2% cash back on all qualifying purchases up to $1,000 per year.
Costco has increased the price of its subscriptions on schedule every five years, Jean Heinbockel, executive analyst at Guggenheim Securities, wrote in a research note, according to Yahoo Finance. Given this, he thinks the annual cost of Gold Star memberships will increase by $5 to $65 per year, while executive members should probably expect to see their prices increase by $10 for an annual fee of $130. .
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Although Costco has long been a popular option for shoppers looking for a bargain, the pandemic has seen a surge of new and regular customers flock to the warehouse to pick up bulk quantities of essential items when closings limited travel outside the home. But even as the world began to return to normal, the company said existing members were choosing to stay with the store, boasting a 92% membership renewal rate in the United States and Canada.
“At the end of the day, we’re certainly very pleased with the loyalty of our members,” Galanti said on the earnings call. However, he remained cryptic about the potential increase in the cost of membership, adding: “At some point it will happen. But stay tuned.”
Costco isn’t the only major retailer to consider raising membership prices. Since February 18, Amazon has raised the price of its Prime subscription service from $119 to $139 per year for its customers in the United States, USA today reported. The cost of monthly subscriptions has also increased by $2, from $12.99 to $14.99 for subscribers who do not hold an annual subscription.
Prime subscribers who already had a subscription before February 18 will not see the price increase until March 25. After that date, their next renewal fee will reflect the new cost. According to company officials, the price increase reflects “continued expansion of Prime member benefits as well as rising wages and transportation costs.”
Although only an add-on to the service, Prime membership has become popular among Amazon customers, especially during the pandemic. In 2021, the company said it added more than 50 million new subscribers year-over-year, bringing the global total to more than 200 million paying members, reports The Verge.
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