Costco Membership Costs Possibly Rising

Costco membership prices may go up this year for the first time in half a decade, but experts say this hike is actually not a huge surprise. Costco’s chief financial officer Richard Galanti recently teased the price rise in an earnings call with investors, according to a report by The Street. He suggested that the change could take place in early June.

Galanti told investors that Costco membership prices typically go up every five years or so, but he did not say anything specific or concrete about this year. He didn’t mention what the new prices might be either, but right now “Gold Star” members pay $60 per year while “Executive” members pay $120 per year. Historically, membership prices go up about $5 or $10 each time.

“On average, they were done about every five — a little over every five and a half years, about five years and seven months,” Galanti said of price increases at Costco. “And five years from the anniversary of the June of ’17 would be this June. So I think the question will continue to be asked until we do or don’t do something.” Costco has two membership tiers right now – “Gold Star” members pay $60 per year while “Executive” members pay $120 for more perks. It seems like this price hike will raise each price by $5 or $10.

Galanti did not pin down a date for the increase. He told investors: “At the end of the day, we certainly feel very good about our member loyalty. At some point, it’ll happen. But stay tuned.”

Financial analyst John Heinbockel predicted that the Gold Star membership will go up to $65 per year while the Executive membership will go all the way up to $130. Heinbockel has reportedly studied the trend in Costco’s changes over the years as well as the current economic trends around the world as part of his work with Guggenheim Securities. He expects this price hike to stick to the five-year schedule Galanti described.

While the price hike might be an annoyance, Costco can likely count on most customers to grin and bear it. The retailer reportedly has a membership renewal rate of 92 percent throughout the U.S. and Canada, and the pandemic only increased its sales. The increased popularity of remote shopping services like Instacart couldn’t have hurt either.

This raises the question of why a price increase is even necessary since Costco is doing so well. A similarly confusing increase just happened at Amazon with the Prime subscription service. In spite of record-breaking sales during the pandemic, Amazon Prime just raised its annual price from $119 to $139 last month. Its monthly memberships jumped from $12.99 to $14.99.

Existing Amazon Prime members saw this price change go into effect on March 25, though some won’t notice until their next renewal in the case of annual members. Anyone interested in a Costco membership might want to consider signing up before June to keep the current price.