Costco Memberships Should Be Getting More Expensive, But They're Not (Yet)
With more than 850 locations around the world, Costco is the go-to retailer for millions of people to do their grocery shopping. The warehouse is a one-stop destination for many as it offers bulk selections at a competitive price. With a membership card, shoppers has access to grocery essentials, such as fresh produce, meats, dairy products, and personal hygiene items.
Costco is beloved by its members for its discounted prices and has built its reputation for its cheap food offerings. The warehouse club has been selling rotisserie chickens for $4.99 for nearly two decades. Costco's food court slings pizza slices and hotdogs for affordable prices as well. Its hot dog and soda combo cost a mere $1.50. In fact, Costco chief financial officer Richard Galanti suggested the combo price will remain $1.50 "forever," CNBC reported in 2022. Most famously, Costco co-founder, Jim Sinegal, reportedly threatened to kill CEO Craig Jelinek if he were to raise the combo price.
While some of Costco's selections may be affordable, its membership price is pretty hefty, starting at $60. If you were putting off getting a Costco membership, now may be the time to get one.
Cost of Costco membership likely to jump
In a recent meeting with investors, Costco Chief Financial Officer Richard Galanti hinted the price of a Costco membership is expected to increase, Insider reports. "It's a question of when, not if," he said.
For now, Galanti stressed the membership fee will remain unchanged. His remarks follow Costco CEO Craig Jelinek's assurance that membership costs would not increase during January's annual meeting. Analysts believe Costco memberships will be getting more expensive soon. UBS US Hardline & Broadline and Food Retail analyst Michael Lasser told Yahoo! Finance that Costco may be increasing its membership cost during the summer.
Costco typically jacks up the cost of its Gold Star membership — its lower membership tier — every five years. The last time the warehouse club raised the price of its Gold Star and Executive memberships was in 2017. But Galanti had been suggesting hiking the cost of membership since 2022, telling investors last year that memberships will likely increase sometime in 2023.
Costco's membership remains strong
If you're interested in Costco's affordable rotisserie chickens or its famous pizza, the warehouse has three membership levels: executive, business, and gold star, ranging from $60 to $120.
Costco's executive membership costs $120 annually. Its cheapest membership is the Gold Star, which costs $60 annually. However, its Gold Star membership is still expensive compared to membership costs at other popular warehouse clubs. Sam's Club and BJ's offer memberships as low as $50 and $55.
Despite Costco's somewhat steep membership cost, people are still signing up — memberships have swelled to more than 68 million. And more than 1 million new members joined during the previous quarter, according to Insider. The warehouse club also was able to retain its members as well, with the renewal rate being more than 90%. In fact, 45% of Costco members hold executive memberships. In total, Costco made $4.2 billion in just membership fees in 2022.