Costco raises membership fees for first time since 2017

If you want to shop, you’ll soon have to pay more. Costco.

The members-only warehouse club announced Wednesday that it will raise membership fees in the U.S. and Canada by $5 starting Sept. 1, bringing the annual membership fee from $60 to $65. The company’s higher-level plan, known as “Executive Membership,” will increase from $120 to $130 a year.

Costco said the price increases affect about 52 million members, just over half of which are executive members.

Shares rose about 2% in extended trading on Wednesday.

This marks Costco’s first membership fee increase since June 2017. The company raises its fees on average roughly every five and a half years, meaning Costco would have had to plan to increase membership fees in late 2022 or early 2023.

But Costco has refrained from raising fees in the past. In an interview with CNBC, then-CEO Craig Jelinek said now wasn’t the right time as consumers deal with high inflation. The company’s former chief financial officer, Richard Galanti, made similar comments on previous earnings calls.

Costco makes most of its revenue from membership fees, helping it keep prices low. Walmart –BJ’s Wholesale, which owns Sam’s Club, raised membership fees for the first time in nine years in 2022. But even after the increase, Sam’s Club memberships are still cheap, at $50 a year for club members and $110 a year for higher-level “Plus” members. At BJ’s Wholesale, annual dues for club members and its own higher-level members are $55 and $110, respectively.

Costco said it stepped up enforcement last year to make sure shoppers weren’t using other members’ cards, and has put more effort into checking membership cards at self-checkout aisles, a move reminiscent of Netflix, which is also cracking down on people who use its service without paying.

Clarification: This article has been updated to clarify that Craig Jelinek is Costco’s former CEO and Richard Galanti is its former chief financial officer.