Costco's Higher Membership Fees May Start This Summer

Popular Costco club. Over 68 million individuals worldwide pay for access to its discount warehouses

The company makes most of its money from membership fees—nearly $1 billion last quarter

but members haven't paid a dime more in over five years. Basic memberships cost $60 and executive options $120 per year.

Company officials have hinted at a fee increase for months. "A question of when, not if," Costco CFO Richard Galanti kept saying

Many expect greater prices because previous increases occurred five years apart in 2006, 2011, and 2017.

"I suspect that they'll announce it later this spring and implement it early this summer," Michael Lasser, UBS US Hardline & Broad-line and food retail analyst

Lasser said the warehouse club will cut grocery and other prices with fee money to make it more competitive and appealing to new members.

"What they find is that as they get the profit infusion from this fee—because it's pure profit—they reinvest a portion in lower prices,"

Costco claimed an all-time high membership renewal rate of 92% in the US and Canada during last week's earnings call.

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