Raise Membership Prices
Costco hikes membership costs every 5.5 years. The chain recently raised membership fees in June 2017, which is about when it would notify members of an imminent price hike.
A Gold Star membership costs $60, while an Executive Membership provides 2% back on most purchases (up to $1,000 yearly) for $120.
Bob Nelson, Costco's SVP of Finance, addressed a prospective price rise on the third-quarter earnings call.
As the five-and-a-half-year anniversary approaches, there will be further conversations with Craig, Ron, and the executive team. "For now, we have no timing updates.
Like its competition, Costco has been leery of adding to its consumers' responsibilities at a financially hard time.
Sam's Club raising prices gives the chain some cover for its own hike, and adding a "cash back" incentive might make the initial increase not actually an increase at all.
It makes more sense for Costco, which costs more than Sam's Club for both membership categories, to raise prices after the holidays.
It would offer the firm a level playing field with its opponent in the fourth quarter and encourage new members to lock in existing pricing for a year.
It's hard to dispute that Costco and Sam's Club don't offer good membership value.
Both have increased costs, thus a slight charge hike is fair. Both chains should be careful and give existing members plenty of warning.
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