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Costco CFO Says Membership Prices Won't Increase—For Now

The company has been hinting at fee increases for more than a year.

Costco has been dropping hints about a membership fee increase for more than a year—but customers will have to keep waiting for word on when that price hike is coming.

During Costco's latest quarterly earnings call on Dec. 14, an investor asked CFO Richard Galanti if the company plans to raise its membership fees. He responded that a hike isn't coming right now, but shoppers shouldn't count on it staying that way forever.

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"It's a question of when, not if," Galanti said of the fee increases.

Galanti has given that exact same answer several times over the past year as investors and members alike speculate about the timing of the warehouse club's next fee increase. Historically, Costco is overdue for a membership fee increase. The company has raised its fees about every five years and seven months in the past. The most recent of these fee hikes took place in June 2017, when Costco increased the cost of its lower-tier Gold Star Membership from $55 to $60 and the cost of the higher-tier Executive Membership from $110 to $120. If Costco had continued to follow its pattern, members would have seen their membership fees increase in January of this year. 

Galanti acknowledged during this week's earnings call that Costco has waited longer than usual for a fee increase, but said they "haven't needed to do it" yet. On the plus side, the fee increase delays are allowing members to squeeze extra "value" out of their current membership, he said.

"We like providing extreme value. Certainly, while we've gone a little longer than the average increase, we feel we certainly have driven more value to the membership."

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The fact that Costco is in no rush to implement fee increases makes sense considering that the latest quarter was a strong one for the company. Costco beat estimates on both quarterly sales and profits and saw its same-store sales in the United States increase by an adjusted 2.6%.

Additionally, Galanti said that membership renewal rates, new signups, and member loyalty have all been "strong." Costco ended the latest quarter with a whopping 72 million paid household members, 7.6% more than it had a year prior. Its revenues from membership fees also increased 8.2% from last year to $1.082 billion.

"At this juncture, we feel pretty good about what we're doing," Galanti said.

Zoe Strozewski
Zoe Strozewski is a News Writer for Eat This, Not That! A Chicago native who now lives in New Jersey, she graduated from Kean University in 2020 with a bachelor’s degree in journalism. Read more about Zoe
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