After seven years of consistent membership pricing, Costco Wholesale said Wednesday it will raise annual membership fees for its US and Canada shoppers, reports Reuters.
The annual fee will increase from $60 to $65 for “gold star” members and from $120 to $130 for its “executive” members, said Costco. The retailer added the maximum annual two percent reward associated with executive membership will also increase to $1,250 from $1,000.
The retailer expects the price change to affect 52 million members, roughly half of whom are in the executive category, according to the report.
“The market has been expecting (discussion of) a membership fee hike for a couple years… management historically tends to raise membership rates every five to six years,” said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors. “This announcement will be a welcome relief to those who have been waiting for it and should provide a solid lift to revenue as well as the stock”. The company’s shares are currently up roughly 34 percent, said the report. (SFA)
