Costco memberships may cost more this summer
Membership fee increases typically occur every five years
FOX Business Flash top headlines for March 10
Here are your FOX Business Flash top headlines for March 10.
Roughly every five years, Costco members have to shell out even more money to gain access to coveted items like its in-house rotisserie chicken, Kirkland bacon and big cheese wheels.
That five-year mark is coming up this June, according to Costco Chief Financial Officer Richard Galanti, who hinted to investors that another fee increase could hit this summer.
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Shoppers make their way through Costco in Idaho Falls, Idaho, during its opening day August 14, 2020. (John Roark/The Idaho Post-Register via AP / AP Newsroom)
"On average, they [membership fee increases] were done about every five — a little over every five and a half years, about five years and seven months," Galanti told investors during the last earnings call. "So five years from the anniversary of the June of '17 would be this June."
Galanti did not offer further specifics.
In 2017, the company's annual membership fee increase impacted around 35 million members, half of whom were executive members, according to its March 2017 earnings report.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| COST | COSTCO WHOLESALE CORP. | 964.01 | +8.36 | +0.87% |
At the time, fees increased by $5 for all personal and business memberships in North America. It bumped all U.S. and Canada Goldstar, Business and Business add-on members to an annual fee of $60. Executive memberships in North America increased from $110 to $120.
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Customers fill cups with soda at the food court of a Costco Wholesale Corp. store in San Antonio, Texas, May 30, 2018. (Callaghan O'Hare/Bloomberg via Getty Images / Getty Images)
Galanti didn't specify if a fee increase would actually occur, telling investors, "at some point, it will happen but stay tuned."
Galanti said the company historically looks at its renewal rates and whether the company has increased the value of its membership.
Even with numerous economic headwinds hitting the industry, including inflation hitting a 40-year high, renewal rates continue to increase. During the three-month span ending in March, U.S. and Canada renewal rates stood at 92%, up from the previous quarter.
An employee fills cups with samples of Costco Wholesale Corp. Kirkland Signature brand organic lemonade at a store in San Antonio, Texas, May 30, 2018. (Callaghan O'Hare/Bloomberg via Getty Images / Getty Images)
Worldwide, it was at 89.6%, up 0.6% from the previous quarter, he continued.
As a result, the company feels "very good about our member loyalty, our success in getting members to move to executive member, which are the most loyal," Galanti explained.