Costco raises annual membership fees for first time since 2017

(Bloomberg) — Costco Wholesale Corp. is raising its base membership fee for the first time since 2017, increasing the fee from $60 to $65 a year.

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The 8% price increase will go into effect on Sept. 1, Costco said in a statement Wednesday. The price of the retailer’s premium membership will increase to $130, up from $120 now. The move will affect about 52 million memberships.

Costco shares rose 2.6% at 4:53 p.m. in extended trading in New York.

Investors and analysts have long waited for the Issaquah, Wash., company to raise the price of its membership. Costco typically raises fees every five years or so, prompting analysts in recent quarters to ask for the company’s views on the timing. Executives had said it was only a matter of time and that they wanted to feel comfortable with the company’s renewal rates.

Membership revenue is especially important to Costco, which has used the proceeds to invest in its operations and keep the price of goods low. Higher membership fees will provide a profit boost to Costco, which tries to lure shoppers with low prices, albeit in large quantities, on a relatively limited range of goods.

Costco is following Walmart Inc.-owned Sam’s Club in raising the price of membership as U.S. consumers flock to warehouse stores that offer wholesale quantities of goods to everyday shoppers. Sam’s Club raised its annual fee to $50 for basic and $110 for premium in 2022, though it used its rewards program to reimburse members for the extra cost during the first year.

(This updates the stock trading and adds context in the fourth and fifth paragraphs.)

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