Price hikes will come for Costco Wholesale Corp. memberships, its executive leadership confirmed in last week’s earnings call, but just when shoppers can expect the increase and how big it will be remain unknown.
Richard Galanti, the warehouse retailer’s
COST,
chief financial officer, said during a quarterly earnings call on Sept. 28 that the question of a membership-fee hike is a “matter of when, not if.”
Related: Costco earnings: Can the retailer keep rolling as analysts speculate on membership-fee hike?
The CFO said the last such increase was in June 2017. Costco has historically raised its annual membership fee about every five years.
The gap between that increase and today marks a time lapse he described as being “a little longer” than increases implemented in previous years.
Galanti said Costco does take the state of the economy into account. An inflation report out Friday showed the cost of goods and services rose 0.4% in August — the biggest increase in seven months — mostly because of higher gas
RB00,
prices. But inflation more broadly continued to slow.
“You’ll see it happen at some point, and we can’t really tell you if it’s in our plans or not. We’ll let you know when we know,” Galanti said during the earnings call.
In 2022, just under 119 million people globally had paid for a yearly Costco membership. The number of cardholders has been growing steadily since 2014.
Galanti moved to assure members and investors that Costco believes added value will come with a fee increase, including an updated app that allows users to check gas-pump prices by location and warehouse inventory at specific stores.
“In terms of looking at the values that we provided our members, we continue to increase those in certainly a greater amount than even more than if and when an increase occurs,” the CFO said.
Read: Costco again commits to holding its hot-dog-and-soda combo price constant — possibly ‘forever’
How much do Costco’s membership tiers cost?
Costco has three membership tiers: Executive, Business and Gold Star.
The Gold Star starting cost for membership is $60. It covers personal use and access to all Costco locations worldwide.
The Business membership is also $60 annually, includes a free Household Card, and covers resale and business use. Members on this tier can add an affiliate cardholder for $60.
The Executive membership is the company’s highest level and charges members an annual fee of $120 for two household cards, an annual 2% reward on qualified Costco purchases, check printing and added benefits to select Costco Travel services.
See also: Costco is selling out of small gold bars ‘within a few hours,’ CFO says
A move into healthcare
Costco recently announced it is offering members access to medical care, including $29 virtual primary-care visits, as MarketWatch previously reported.
Costco, through its deal with online marketplace Sesame, is joining a growing number of retailers including Walmart
WMT,
and Amazon.com
AMZN,
pushing into the healthcare business.
As part of the deal, Costco members will get access to Sesame’s marketplace and its “best pricing,” which includes $79 in-person medical visits and 10% off other services, among other perks. On Sesame, clinicians set their own prices and patients pay them directly through the platform, cutting out insurance companies.
Read more: Costco to offer members medical-care access. Here are the retailers moving into healthcare.
This story originally appeared on Marketwatch
